BP is seen as a takeover target, reigniting Shell merger rumors

Giant BP oil has been pushed to the attention center as a main acquisition candidate, but energy analysts question whether any of the most likely suitors will increase to the occasion.

The besieged energy giant of Great Britain, which celebrates its annual general meeting on Thursday, has recently tried to resolve a kind of identity crisis by launching a fundamental restart.

Seeking to rebuild investors, BP in February promised to reduce renewable spending and increase annual expense in its main oil and gas business. CEO Murray Auchincloss has said that the pivot is beginning to attract a “significant interest” in the company’s non -basic assets.

BP’s green strategy, U-TURN follows a prolonged period of low performance in relation to its peers in the industry, with its depression the price of the actions that reave the speculation of a possible link with national rival Shell. American oil giants Exxon Mobil and Chevron They have also promoted their legs as possible suiters for oil of £ 54.75 billion ($ 71,61 billion) of oil.

Shell declined to comment on speculation. BP, Exxon and Chevron spokesmen did not respond to a comment request when CNBC contacted.

“Certainly, BP is a potential acquisition objective, no doubt about that,” said Maurizio Carulli, an energy and material analyst at Quilter Cheviot, to CNBC per video call.

“It would conceptualize the question of ‘Will Shell Bid for BP’ in the most general consolidation of what is happening in the resource sector, both oil and mining, partly in the last year that many companies thought it was battle to buy.” “

In the energy sector, for example, Exxon Mobil completed its purchase of $ 60 billion or pioneer natural resources in May last year, while Chevron still seeks to acquire HESS for $ 53 billion. However, the letter agreement is still involved in legal uncertainty, with an arbitration hearing scheduled for next month.

In the mining space, the market speculation seized the overmarcha at the beginning of the year after the reports of a possible link between the giants of the Rio Red and Glencore industry. Both companies declined to comment at that time.

The Carulli of Quilter Cheviot called Chevron as a possible suitor for BP, particularly if the search for the US energy giant. It offers.

Speculation about a potential fusion between Shell and BP, meanwhile, is far from being new. Carulli said that while rumors have some merit, a prospective agreement would probably trigger antitrust concerns.

Perhaps the most important thing, Carulli added that a movement to acquire BP would conflict with Shell’s firm commitment to capital discipline under the CEO Wael Sawan.

“Never say, right? I think that even Exxon-Chevron in the depth of pandemic conversations, so I think that would have been lower to say,” said Allen Good, director of shares research at Morningstar, to CNBC by phone.

“I would like to take away anything on the table. You know, oil and gas face an existential crisis. Now, it looks different in how soon that crisis will come to mind. I think we are decades away,” said Good.

For Shell, Morningstar’s good said that any persecution or BP is probably an attempt to merge the two British companions, instead of a direct acquisition, although he said he does not expect such perspective to materialize.

When asked about the probability that Chevron seeks to buy BP if an agreement to acquire HESS collapses, Morningstar’s good said he could not rule it out.

“BP certainly does not have the growth prospects that HESS has, but you could a situation in which, again, as I said with Shell, I would have Chevron acquiring BP, eliminating many costs, certainly the headquarters of Woudquarts Woudquarts Growth Conerns Expermian for Chevron, in that case, I would be a bit skeptical,” said the good growth.

“The problems of the thesis faced by companies are to please shareholders, and the two ways to do so are to reduce costs and return effective to shareholders. Therefore, if you can continue with that model in some way, that is the way to do it.”

Michele Della Vigna, head of EMEA Natural Resources Research in Goldman SachsHe described the recently strategic restart of BP as “very wise” and “reflective”, but acknowledged that it may not have gone far enough for an activist inverter.

According to the reports, the US Coverage Fund. Elliott Management has built a participation of about 5% to become one of the largest shareholders of BP. The activist investor follows this, meanwhile, recently pressed for investors to vote against the re -election of Helge Lund as president at the next BP shareholders meeting in protest of the recent UR of U of the firm. Since then, BP has said that Lund will renounce, probably in 2026, starting a succession process.

“I think there are three main options in the BP portfolio that any activist investor would love to see monetized. The first is not in the hands of BP, it is the monetization of the Rosneft stake,” Della Vigna told CNBC Call.

BP announced that it was abandoning its shareholding of 19.75% in the Russian company of state oil Rosneft shortly after the large -scale invasion of Ukraine of Moscow at the end of February 2022. It had marked an expensive and abrupt endly. Three than what who does not

A second optional for BP, said Della Vigna, is the marketing and convenience business of the company.

“I mean, within BP, a company that lies three times Ebitda, there is a division that can trade with 10 times Ebitda, right? Incredible. You can make the same point for many of the other large oils,” said Della Vigna.

Ebitda is a standard metric that refers to the profits of a company before interest, taxes, depreciation and amortization.

“The third option is that BP is an energy company centered in the US. And is clear, right? BP is the most exposed to all the largest, rather than Exxon and Chevron,” said Della Vigna, noting that 40% of BP’s cash flow comes from the United States.

“Therefore, being on the list in the United Kingdom, when the United Kingdom gives it the biggest discount of any other region in Big Oil, does not feel good. I think it is worth consulting some form of transatlantic relocation or fusion,” he added.