Shell weighs up takeover of BP

UK supermajor Shell and its advisers have been considering a potential takeover of rival energy major BP, which could set up one of the largest deals in the history of the oil and gas industry.

According to reports from Bloomberg, which cited people close to the matter, Shell may wait for BP to reach out for another possible buyer before playing its hand. The feasibility of this move, the sources claimed, has been discussed within Shell ranks for several weeks now.

The report added that everything is allegedly still in its infancy, and Shell could perhaps decide to focus on share buybacks and smaller acquisitions rather than such a big merger.

The deal between the two could be one of the largest oil and gas deals ever seen. Shell’s market value of £145.6bn ($193.2bn) is way above BP’s £55.9bn ($74.2bn), and a combination of the two would create a firm with a market value of over $267bn.

BP CEO Murray Auchincloss said at the start of the year that he would reset BP’s strategy, with the company firmly backing fossil fuels again. However, the plan did not result in much as the profits for the first quarter of the year dropped to $1.4bn, a far cry from the $2.7bn from the same period last year. This was all accompanied by shares dropping over 30% within the past year.

Shell also reported a lower profit than in the first quarter of 2024, but its adjusted profits of $5.6bn were still higher than analysts expected.