Shell eyes BP acquisition

Any move hinges on further declines in BP’s share price and oil market shifts.

Shell is evaluating a potential bid for rival BP, according to Bloomberg News, though any move hinges on further declines in BP’s share price and oil market shifts. The discussions are reportedly still in early stages, with Shell working alongside advisers to assess the feasibility of such a deal.

While Shell has yet to make a formal decision, the energy giant is considering whether the acquisition could enhance its global scale, bringing it closer to industry leaders like Exxon and Chevron. However, Shell CEO Wael Sawan recently told the Financial Times he prefers buying back Shell’s own stock, citing the need to first “have our own house in order.”

Once equals, Shell is now nearly twice the size of BP, with a market value of around £149 billion. A potential merger would likely face significant regulatory scrutiny due to its size and market implications.

In the meantime, Shell is pursuing a $3.5 billion share buyback after reporting strong first-quarter results. The company may also be positioning itself for a potential move if BP seeks a partner or another bidder emerges.

BP, for its part, is under pressure from activist investor Elliott Investment Management, which has taken a 5% stake. The oil major is aiming to cut costs, offload $20 billion in assets by 2027, and rebuild investor confidence amid internal restructuring, including the exit of its strategy chief.

Neither Shell nor BP have confirmed acquisition talks, with Shell reiterating its focus on performance, discipline, and simplification.