Shell is moving closer to a major deepwater expansion, engaging in advanced negotiations to acquire LLOG Exploration Offshore in a deal valued at more than $3 billion, according to sources familiar with the matter.
The discussions, first reported by Reuters, signal Shell’s push to strengthen its upstream portfolio through the purchase of one of the largest privately held oil and gas producers in the U.S. Gulf of Mexico. Two people with knowledge of the talks said the parties are nearing an agreement, with one indicating a deal could be finalised by year-end. Both sources cautioned that no agreement is guaranteed and spoke on condition of anonymity because the deliberations are private.
Shell declined to comment, while LLOG did not respond to a request for comment.
LLOG currently produces around 30,000 barrels of oil equivalent per day, a figure expected to rise significantly by the end of the decade, according to Ross Lubetkin, CEO of consultancy Welligence. The producer has been expanding its footprint, announcing first production last September from its Salamanca floating unit, which supports drilling in the Leon-Castile fields and is designed to handle up to 60,000 barrels of oil and 40 million cubic feet of natural gas per day. The company, whose partners include Repsol, also acquired 41 deepwater Gulf blocks totalling roughly 236,000 acres in July 2024.
Shell is already one of the region’s largest producers, and the Gulf continues to draw interest from global energy firms seeking long-lived oil and gas reserves. Analysts have noted Shell may increasingly turn to acquisitions to deepen its upstream prospects. CEO Wael Sawan told analysts during a third-quarter earnings call that compelling M&A opportunities could emerge in 2026. HSBC analyst Kim Fustier wrote in October that North American gas or deepwater oil assets would be logical additions for Shell.
LLOG operates several major assets, including the Who Dat floating production system, which has been running since 2011 and currently delivers roughly 21,000 barrels per day of oil and 51 million cubic feet per day of natural gas. The company remains under the ownership of the family of founder Gerald Boelte, who died last year, and employs about 125 people.
Reuters previously reported in October that LLOG was exploring a sale.
