UK Oil Major Shell Says Not In Talks To Buy Rival BP
United Kingdom:
British oil major Shell said Wednesday it was not in talks with BP to acquire its rival, after the Wall Street Journal reported there had been preliminary discussions.
"This is further market speculation. No talks are taking place," a Shell spokesman told AFP, adding that the firm was focused on adding value by improving its performance.
BP declined to comment.
The Wall Street Journal said its sources indicated that the two firms had held "early talks" about merging their operations.
A tie-up between Shell and BP would be one of the biggest mergers ever in the oil and gas industry and would give it added heft against US oil majors ExxonMobil and Chevron, and France's TotalEnergies.
"All big companies will look hard at any acquisition opportunities in their industry that could greatly increase their size and scale," AJ Bell investment analyst Dan Coatsworth told AFP.
"But that doesn't mean deals will go ahead," he added, calling Shell buying BP "the perennial takeover rumour that won't go away".
City Index analyst Fawad Razaqzada told AFP that a Shell purchase of BP would trigger competition concerns, making it difficult to receive approval from regulators.
BP has struggled in recent years against its rivals.
In February, it abandoned its ambitious climate objectives to refocus on oil and gas in a bid to boost flagging profits.
BP's first quarter net profit fell by 70 percent to $687 million, while Shell beat analyst expectations with a 35 percent drop to $4.8 billion in net earnings.
Activist US investment fund Elliott, which recently built up a stake of more than five percent in BP and has been calling for strategic changes, also declined to comment when contacted by AFP.
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