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For weeks, the market tongue has been struggling to talk about a potential merger between the British oil giants – until weeks of speculation ended, with Shell denied reports on Thursday that it was talking about gaining BP.
But how did we reach the point where BP Exploration, the name BP Exploration Company in 1909, is now seen as a possible takeover target for long-term competitors?
Reset
Back in 2020, under the guidance of then-new CEO Bernard Looney, BP announced that it would develop a strategy to reinvent itself. “Net-zero companies by 2050 or earlier” At the same time, increase investment in renewable energy projects. The energy giant is committed to “transforming” as it changes this new strategy.
At the time, Rooney admitted that the transition would be a challenge, but thought it was also a “huge opportunity.”
Initial outbreak
Looney launched this strategy, just like the 199 pandemic gradually developed around the world, triggering demand shocks and cracks in crude oil prices. The energy giant released its first full-year loss in a decade, but the company revamped it, with annual profit of $7.6 billion in 2021 and then more than tripled in 2022 to $27.65 billion as Russian invasion of Ukraine kicked off oil prices.
Rooney praised the result and told CNBC The company now leans towards its strategy.
“Over the past decade, we have announced up to $8 billion in investments in energy transitions and up to $8 billion in investments to oil and gas to support energy security and energy affordability for the decade,” he said.
Forecasts enhance investment in the company’s energy transition and published on the 2023 version of the BP version Energy prospectsthe share of fossil fuels in raw energy will drop from 80% in 2019 to 20% in 2050.
Rooney leaves
When Bernard Looney was abruptly announced his resignation in September 2023 after less than four years of work, Bernard Looney revealed that he was not “completely transparent” in his relationships between the workplaces before he became CEO.
CFO Murray Auchincloss then stepped in to interim CEO and was then permanently appointed in January 2024.
But those who see BP as the vision of a renewable energy giant have now left the building.
Guess the installation
Compared with peers, Looney’s departure and BP’s stock continued to underperform, with annual profit declines in 2023 and 2024 raising new questions about the strategy of the oil specialty and its future as an independent company. In addition to Shell, Chevron and Exxon Mobil are also touted as potential suitors for BP, while Emirates’ ADNOC reportedly has invested in some natural gas assets.
Radical Investors Elliott According to reports, Auchincloss revealed that in February, it was established in the oil professional stake in February. BP’s strategic reset This starts increasing investment in oil and gas and reduces focus on renewable energy. Investors are not impressed yet, and since then, the stock has fallen 15%.
Talk to CNBC AprilAuchincloss said without a doubt that the company is becoming a target for takeover, saying: “We are a strong independent company. His companion Shell Ceo Wael Sawan told CNBC at the same time June M&A opportunities are “we have a high bar” but think the company continues to favor buying back its own shares.
What’s next
For now, Shell’s strong rejection of these reports seems to have thrown out cold water, which could potentially acquire BP. Morningstar senior equity analyst Allen Good questioned the merits of BP’s Shell protocol at this time and told CNBC that “unless the valuation is super attractive”, it may not be worth it for executives.
