Yesterday saw the birth of a new player in the global energy industry. In the middle of some of the toughest market conditions seen in decades, the joining together of Shell and BG creates a company of extraordinary strengths, a combination greater than the sum of our parts. I feel privileged to be part of this historic, transformative moment.
It has been an intense ten months since we first announced the combination with BG and yesterday was a very special milestone for us, officially the first day of operations for the combined company. It also has been a period of great volatility. Although the oil price has fallen since our announcement, I remain convinced of the strategic and financial merits of the deal.
Over time, I expect the fundamentals of energy supply and demand to reassert themselves and the strategic and economic benefits of the deal to fully deliver for shareholders. The deal reinvigorates Shell and will be a springboard for further transformation. We now plan to shape a simpler, leaner, more agile and competitive company focusing on our priorities for growth in liquefied natural gas and deep water.
The acquisition significantly boosts our oil and gas reserves and production capacity and is expected to provide a strong injection to our operating cashflow. It underpins our role as one of the world’s largest independent producers of LNG.
This deal is not about size, though. It is about quality. The combined value of our existing and potential energy projects creates a company more able to brave the cycles in our industry and strengthens our ability to pay the dividend at any oil price that might reasonably be expected.
In the UK, Shell inherits several projects in the North Sea. These are a good fit with our existing operations in what is still an important region for energy production, despite the challenges it faces.
Shell has acquired big oil and gas projects in Brazil and Australia and interests in other key countries. The deep-water interests in Brazil we now own were one of the key drivers of this deal. Brazil is a country we know well, through the exploration and production aspects of our business, our retail outlets and our low-carbon biofuel joint venture. It is a country of the highest strategic importance to us, with plenty of potential for growth.
Our global deep-water experience and technical expertise will help us to build on our existing relationship with Petrobras, the national oil company. The Libra joint venture already plans to develop a major oilfield more than 100 miles off the coast of Brazil. Our newly acquired deep-water operations off Brazil will add to current production from our Parque das Conchas oil and gas project.