Royal Dutch Shell is in advanced talks to acquire BG Group for around ￡46bn ($68bn), in a deal that would expand the Anglo-Dutch group’s foothold in some of the world’s most exciting oil provinces and cement its dominance of the global trade in natural gas.

Since the price of crude began its rapid decline last June, expectations have been high that the oil sector could see a repetition of the mergers and acquisitions fever that reconfigured the industry in the late 1990s — another period of low oil prices.

That created the current crop of big oil companies such as BP, Chevron and ExxonMobil. Shell’s bid is worth about ￡46bn, according to people familiar with the matter, which represents a 50 per cent premium to BG’s market value. BG shares closed up 6.3 per cent at 910.4p on Tuesday, valuing the company at ￡30.7bn, before news of the talks broke.