Latest news with #RoyalDutchShell
The Star
01-07-2025
- Business
- The Star
Shell may still need M&A after ruling out buying BP
Oil drums containing lubricant oil sit on a conveyor belt at a Royal Dutch Shell lubricants blending plant in Europe. — Bloomberg BRITISH oil and gas giant Shell Plc has quashed a rumour: It's not buying BP Plc. But last week's forceful denial doesn't address why the merger and acquisition (M&A) chatter gained so much traction, which has less to do with the parlous state of BP than with Shell itself. Looking to 2030 and beyond, it does feel like Shell needs to buy something or someone. Since his January 2023 appointment as chief executive officer, Wael Sawan has done a decent job steadying Shell. Spending and debt are down, unprofitable green projects are gone and cash generation is improving. That's all well and good; but viewing such business basics as evidence of success just shows how the wheels had fallen off before his arrival. What's still missing is any sense of a vision to sustain oil and gas production beyond the next five years. To achieve that, sooner or later Shell will need to make acquisitions; it could be a series of projects, or it could be a rival. If that's the case, the best time to pull the trigger could come soon as the plunge in oil prices creates industry-wide distress, creating opportunities. Admittedly, the 'show-us-your-2030-plan' demand is a bit premature – and even a little unfair. Sawan has plenty on his plate from 2025 to 2027 before turning his attention to the next decade. Shell is trying its best to keep the focus on the task at hand now, telling investors that its priority is 'performance, discipline and simplification.' To the company's credit, its narrative is working. Year-to-date, Shell has beaten its Big Oil rivals, with shares up 4%. Exxon Mobil Corp is up by about half of that, Chevron Corp is about flat, while TotalEnergies SE and BP are both down. Crucially, Sawan has turned the page on Shell's tendency for nasty earnings surprises every few quarters. It's almost as if the company had gone back to the years of 'You can be sure of Shell' – one of the advertising industry's best-known taglines. Still, the company's own forecasts, last updated at its March capital markets day, make it clear that fossil-fuel production will decline in the early 2030s. Sawan's options That leaves Sawan with four options: do nothing and let output fall, perhaps betting that oil demand peaks in the early 2030s; use organic opportunities to squeeze out a few extra barrels; make a few bolt-on purchases in the sub-US$10bil range, beefing up the hopper for a few years; or go big with a major acquisition, in the US$50bil-plus range. Filling the production drop from 2030 to 2035, probably in the range of 200,000 to 300,000 barrels per day – or about 10% of its total – is possible without acquisitions. Key projects The company has been expanding its working interest in some of its key projects, effectively buying more barrels with relatively little incremental capital. Only this year, it upped its ownership in the Ursa project in the Gulf of Mexico to 61% from 45% for US$735mil, and in the Bonga field in Nigeria to 67.5% from 55% for US$510mil. More of the same can be a cheap way to boost output, and Shell has a US$1bil to US$2bil wiggle room for such opportunities within its current annual US$20bil to US$22bil capital spending target range. If similar transactions aren't enough, Shell may pursue smaller deals. Is there a case for larger deals? Perhaps. Still possible I believe that a Shell-BP merger is still possible, but it has a much better chance of happening if BP, admitting it's in a corner, makes the first move and the deal becomes a merger at a nil premium. I don't see Shell paying a takeover premium; Sawan has other options for a big transaction. — Bloomberg Javier Blas is a Bloomberg opinion columnist. The views expressed here are the writer's own.
Bloomberg
25-06-2025
- Business
- Bloomberg
Stock Movers: Micron, BP, Nvidia
On this episode of Stock Movers: Listen for comprehensive cross-platform coverage of the US market close as heard on Bloomberg Television, Bloomberg Radio, and YouTube with Romaine Bostick, Scarlet Fu, Alix Steel, Carol Massar and Tim Stenovec. - Micron (MU), the largest US maker of computer memory chips, gave an upbeat forecast for the current quarter, helped by demand for artificial intelligence equipment. Fiscal fourth-quarter revenue will be roughly $10.7 billion, the company said in a statement Wednesday. That was well ahead of the $9.89 billion average analyst estimate, sending the shares up in late trading. Micron is seeing increasing demand for components like its high-bandwidth memory, which are used in machines that develop and run AI tools. The company expects continued growth from that market as such software becomes more complex, requiring bigger amounts of memory. The company is also starting to recover from narrower profit margins in the previous quarter. - BP (BP) shares surged as much as 10% in trading fter the Wall Street Journal reported that Royal Dutch Shell Plc is in early-stage talks to acquire its London-based rival. Talks between company representatives are active, but any terms of a potential deal couldn't be learned and a transaction is far from certain, the newspaper reported, citing people familiar with the matter. BP is under intense pressure after years of under-performance and the intervention of activist shareholder Elliott Investment Management. Speculation has been growing that the embattled company would become a takeover target, and Bloomberg reported in May that Shell had been studying the merits of a deal. - Nvidia (NVDA) shares rose to an all-time high on Wednesday, with the leader in artificial intelligence chips extending an advance that has cemented its position as one of the most valuable companies in the world. The stock rose 4.3% to $154.31, taking out an all-time high that has stood since January. The record is only the latest milestone for the company, which has risen 63% off an April low, a rally that has added nearly $1.5 trillion to its market capitalization. With the day's gain, Nvidia stands as the world's largest stock, with a market cap of about $3.77 trillion, overtaking Microsoft Corp. at $3.66 trillion.
AU Financial Review
25-06-2025
- Business
- AU Financial Review
BP shares surge on report of takeover talks with Shell
BP shares jumped as much as 10 per cent in New York after the Wall Street Journal reported that Royal Dutch Shell is in early-stage talks to acquire its London-based rival. Discussions between company representatives are active, but any terms of a potential deal couldn't be learned and a transaction is far from certain, the newspaper reported, citing people familiar with the matter.
Bloomberg
25-06-2025
- Business
- Bloomberg
Shell Is in Early Talks to Acquire Oil Rival BP, WSJ Reports
Royal Dutch Shell Plc is in early talks to acquire BP Plc, which is considering the approach carefully, the Wall Street Journal reported. Talks between company representatives are active, but any terms of a potential deal couldn't be learned and a transaction is far from certain, the newspaper reported, citing people familiar with the matter.
CTV News
13-06-2025
- Business
- CTV News
IEA says it stands ready to tap emergency oil stocks, OPEC sees no need
The oil drilling rig Polar Pioneer is towed toward a dock in Elliott Bay in Seattle. The rig is the first of two drilling rigs Royal Dutch Shell is outfitting for Arctic oil exploration on May 14, 2015. (AP / Elaine Thompson) The west's energy watchdog said on Friday it was ready to release oil stocks should the market experience shortages following Israel's attack on Iran, drawing criticism from rival OPEC which said the statement would only create fear in the market. The International Energy Agency, representing oil consumers, and the Organization of the Petroleum Exporting Countries, representing some of the world's top oil producers, have in recent years clashed on global oil demand trajectories and the pace of the energy transition. The IEA's head Fatih Birol said that while the oil market was well supplied, the agency would be ready to act if needed, adding that the agency's oil security system held US1.2 billion barrels of oil in strategic and emergency reserves. OPEC Secretary General Haitham Al Ghais criticized Birol's statement, saying it 'raises false alarms and projects a sense of market fear through repeating the unnecessary need to potentially use oil emergency stocks.' He said there were no developments in supply or market dynamics that 'warrant unnecessary measures.' Oil prices jumped sharply after Israel launched a barrage of strikes across Iran on Friday, saying it had attacked nuclear facilities and missile factories and killed a swathe of military commanders in what could be a prolonged operation to prevent Tehran building an atomic weapon. Oil prices were trading seven per cent higher, their biggest daily spike since 2022 when Russia invaded Ukraine. The United States and its allies, in coordination with the IEA, last tapped emergency oil stocks in early 2022 after the Russian invasion of Ukraine, a decision that OPEC heavily criticized at the time. While Israel has stopped short of targeting Iran's energy facilities, market participants are wary the situation may escalate further leading to damage to energy infrastructure in Iran or its neighbors, as well as a blockade of the Strait of Hormuz. In September 2019, Iran-backed Houthi militias in Yemen launched a drone attack on Saudi Aramco's Abqaiq oil processing plant, knocking 5.7 million bpd of Saudi oil production offline and sending the oil market into a frenzy. Iran's diplomatic relations with its Gulf neighbors Saudi Arabia and the United Arab Emirates have improved significantly since that attack, though there are still some concerns in the region of a repeat of the Abqaiq scenario. 'Oil has already spiked ... and its ultimate landing point will likely hinge on whether Iran revives the 2019 playbook and targets tankers, pipelines, and key energy facilities across the region,' RBC Capital Markets analyst Helima Croft said in a note following the Israeli attack. (Reporting by Ashitha Shivaprasad in Bengaluru and Ahmad Ghaddar in London, Editing by Louise Heavens and Susan Fenton)
