Premier Oil says no approach from Shell

Premier Oil Plc has not received a takeover approach from Royal Dutch Shell Plc, Premier's chief executive officer said yesterday, despite a report the oil major was eyeing the UK oil explorer.

"I have no knowledge of any talks ongoing with Shell. We have not received any approach from Shell," Simon Lockett said, speaking in a telephone interview from Kuwait.

A spokesman for Shell said the company did not comment on market speculation.

Earlier, a Dow Jones Newswires report said that Shell was seeking bank advice regarding a possible bid for Premier Oil, citing people familiar with the matter.

Dealers seemed to think a bid unlikely as Premier shares traded down 0.43 per cent at 1,038 pence at 0847 GMT, compared to a flat DJ Stoxx European oil and gas sector index.

Shell's "A" shares were down 0.6 per cent at 1824 pence. Analysts have tipped Premier, like many independent UK oil companies, as a potential bid target for majors like Shell which are finding it hard to add new reserves by exploration alone.

However, some industry executives do not believe Premier management would be keen on a sale. Mr Lockett took over as chief executive officer just 17 months ago and brought a new management team with him.

The firm has since shifted its exploration strategy to focus on bigger impact wells and it hopes this will start to significantly add to reserves over the coming two years.