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(Bloomberg) — Shell Plc (SHEL) agreed to buy Canadian producer ARC Resources Ltd. (ARX.TO) for $13.6 billion, its biggest deal in more than a decade as it seeks to bolster fossil fuel reserves.

ARC’s shares surged while Shell’s dipped.

ARC has a high-quality, low-cost shale gas and liquids base that complements Shell’s existing operations in Canada, the London-based company said in a statement.

With no significant acquisitions since Chief Executive Officer Wael Sawan took the helm, Shell’s efforts to replace its long-term reserves base have come under mounting scrutiny. Along with several of its energy major peers, the company has been refocusing on its core oil and gas businesses in a drive to boost returns to investors.

“This establishes Canada as a heartland for Shell while furthering our strategy to deliver more value with less emissions,” Sawan said in the statement. The ARC acquisition “strengthens our resource base for decades to come.”

The ARC deal will be Shell’s biggest acquisition since BG Group in 2015, according to data compiled by Bloomberg. The deal will be paid for with about 25% cash and 75% shares, at a premium of 20% to ARC’s 30-day weighted average price.

ARC’s shares gained as much as 24%. Shell were down 1.8% at 3,247 pence as of 3:13 p.m. in London.

Sawan’s focus in his three years since taking over the firm has been repairing the balance sheet, cutting costs and offloading low-returning assets.

The deal increases Shell’s annual free cash flow and compound annual growth rate, Sawan said on a call with the media.

It supports Shell’s target of sustaining material hydrocarbon liquids production of about 1.4 million barrels a day toward 2030 and beyond, according to the statement. It will also support output from the LNG Canada liquefied natural gas plant, in which Shell has a 40% stake.

A phase two expansion of LNG Canada has been expected, but Sawan said this has no bearing on that decision. The LNG site is focused on continuing to ramp up and sustain output.

ARC’s operations are situated in the same region as Shell’s Groundbirch asset in British Columbia, which supplies LNG Canada, and the Gold Creek project in neighboring Alberta, according to the statement. The acquisition also gives Shell expsoure to another LNG export project with ARC’s supply deal into Cedar LNG, a smaller facility under construction near Shell’s own facility.

Shell’s purchase of ARC marks a pivot for the company’s North American operations after it largely sold its position in the oil sands in 2017 to Canadian Natural Resources Ltd. The London-based company also sold its US shale assets in the Permian Basin to ConocoPhillips in 2021.

This is the biggest Canadian oil and gas deal since 2012, when CNOOC Ltd bought oil sands producer Nexen Energy Ulc. for $15.1 billion at the time.

The boards of both companies unanimously supported the transaction, according to the statement. It is expected to close in the second half of 2026, subject to shareholder, court and regulatory approvals.

—With assistance from Ruth Liao and James Herron.

(Updates with comments from Shell CEO and details throughout.)

©2026 Bloomberg L.P.