Shell lobs $617m takeover bid for ERM Power as it eyes Australian expansion

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Aug 22, 2019 6:57 pm GMT
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Given Australia’s interest in developing a hydrogen economy I wonder whether this is a smart long term acquisition by Shell.

Shell lobs $617m takeover bid for ERM Power as it eyes Australian expansion

Global oil and gas giant Shell has launched a $617 million takeover offer for Australian energy retailer ERM Power as the multinational seeks to make a foray into the country's energy retailing market. Shell is proposing to buy ERM – Australia's second-largest power retailer to commercial and industrial customers – for $2.465 a share, the two companies announced on Thursday morning.

Source: amp-smh-com-au.cdn.ampproject.org

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Matt Chester on Aug 22, 2019 8:20 pm GMT

I'm not too informed about ERM Power-- what about this acquisition spells hydrogen to you? If you're right, I'm likewise raising an eyebrow to what this means for Shell's path forward

Charley Rattan on Aug 24, 2019 7:41 am GMT

Hi Matt, as an ex -Shellie and current shareholder I track them closely. The opportunity aligns Shell's 2050 net zero goals - they are especially strong on hydrogen - with Australia's emerging hydrogen agenda. Watch this space.

Bob Meinetz on Aug 26, 2019 5:02 pm GMT

Charley, it's no coincidence the only significant investment in the "hydrogen economy" comes from oil companies, in particular Royal Dutch Shell and Chevron.

The business model is not complicated: from a feedstock of extracted "natural gas" (methane), they will use the steam reformation process to separate hydrogen from methane, with a well-to-wheels carbon emissions footprint as bad or worse than refining gasoline from oil.

In other words, it's a scam - typical of Shell's dirty dealings in other developing countries, where the company operates outside the purview of regulators.

Shell Tries to Come Clean on Its Dirty Past in Nigeria

Charley Rattan on Aug 25, 2019 10:18 am GMT

Obviously it’s in the oil companies interests Bob, they have major decommissioning liabilities coming. Electrolysis appears to be the front runner technology

Bob Meinetz on Aug 26, 2019 5:03 pm GMT

Charley, though electrolysis is considered a front-runner technology by the people who sell wind turbines and solar panels, the quantity of hydrogen they generate is, and always will be, inconsequential for reducing carbon emissions.

It's considered a front-runner technology by oil companies only for greenwashing purposes. By mixing a tiny amount of electrolyzed hydrogen with hydrogen produced from methane in bulk, it can be promoted as a "green" fuel.

For both consumers and the environment, hydrogen is a loser.

Charley Rattan on Aug 27, 2019 7:40 am GMT

I suspect we may be at variance there Bpb. I'm looking forward to the Scotwind leasing round to see what emerges with relation to it becoming a 'bulk fuel'.

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