BP is considered a target of control, reviving the rumors of shell fusion

The BP oil giant has been put under the spotlight as a leading candidate – but energy analysts wonder if one of the most likely contenders will increase on the occasion.

The British besieged energy giant, which is holding its annual general meeting on Thursday, recently sought to resolve an identity crisis by launching a fundamental reset.

Looking to rebuild investors' confidence, BP is committed in February to reduce renewable expenditure and stimulate annual expenses for its main oil and gas activities. CEO Murray Auchincloss has said That the pivot begins to attract “significant interest” in the non -essential assets of the company.

The green strategy of BP U-Tour follows an extended period of underperformance compared to its peers of industry, with its depressed stock market course Rallinating speculation of a potential range with a domestic rival Shell. American oil giants Exxon Mobil And Chevron were also presented as possible suitors for the oil adult of 54.75 billion pounds Sterling ($ 71.61 billion).

Shell refused to comment on speculation. BP spokesperson, Exxon and Chevron did not respond to a comment request when contacted by CNBC.

“Admittedly, BP is a potential takeover target – without a doubt,” CNBC Maurizio Carulli, energy analyst and materials at Quilter Cheviot, told CNBC.

“I would conceptualize the question of” Will Shell Boder for BP “in the more general consolidation that it occurs in the resource sector, both oil but also mining-especially during the past year, many companies thought that the purchase was better than building,” he added.

In the energy sector, for example, Exxon Mobil completed Its purchase of $ 60 billion in natural resources Pioneer in May of last year, while Chevron is still looking to acquire Hess for $ 53 billion. This last agreement remains enveloped in legal uncertainty, however, with an arbitration hearing scheduled for next month.

In the mining space, market speculations entered overdrive at the start of the year following the relationships of a potential link between the giants of the Rio Tinto and Glencore industry. The two companies refused to comment at the time.

Carulli de Quilter Cheviot named Chevron as a potential pretender for BP, in particular if the pursuit by Hess's American energy giant passes.

Speculation on a potential merger between Shell and BP, on the other hand, is far from new. Carulli said that if rumors have a certain merit, a potential offer would probably trigger antitrust concerns.

Perhaps even more important, Carulli added that a decision to acquire BP conflicts with Shell's unshakable commitment to capital discipline under CEO Wael Sawan.

“Never say, right? I think even Exxon-Chevron in the depth of the pandemic held talks, so I think it would have been even wilder to say,” said Allen Good, director of actions in Morningstar, at CNBC by phone.

“I would not withdraw anything from the table. You know, oil and gas face an existential crisis. Now, the views differ during the time that this crisis is going to go. I think we are still decades,” said Good.

For Shell, Morningstar's good said that any BP's prosecution would probably be an attempt to fusion the two British peers, as opposed to a pure and simple acquisition – although he said that he does not expect such a perspective to materialize in the short term.

Asked about the probability that Chevron seeks to buy BP if an agreement to acquire Hess collapses, the good of Morningstar said that he could not exclude him.

“BP certainly does not have the prospects for growth that Hess does, but you could get a situation where, once again, as I said with Shell, you would have chevron to acquire BP, by removing a lot of costs, the head office would certainly be in London … But that would not respond to the concerns of ex-permian growth for Chevron.

“The problems with which these companies are faced with the shareholders, and the two ways to do so are really to reduce costs and return money to shareholders. So, if you can continue to rely on this model, then it's probably how to do it,” he added.

Michele Della Vigna, research manager Emea Natural Resources in Goldman Sachsdescribed the recent strategic reset of BP as “very wise” and “thoughtful”, but recognized that he may not have gone far enough for an activist investor.

US Hedge Fund Elliott Management A would have Built a participation of almost 5% to become one of the largest BP shareholders. The activist investor follows this, on the other hand, recently prompted investors to vote against the renewal of Helge Lund as president of the next BP shareholders' meeting to protest the recent firm's strategy. BP has since declared that Lund would resign, probably in 2026, launching a process of succession.

“I think there are three main options in the BP portfolio that any activist investor would like to see monetized. The first is not all in the hands of BP, it is the monetization of Rosneft's stake,” Della Vigna told CNBC on a video call.

BP announced that it abandoned its 19.75% participation in the Russian oil company Rosneft shortly after the large -scale invasion of Moscow Ukraine at the end of February 2022.

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

“I mean, within BP, a company that is negotiated in three times EBITDA, there is a division which can negotiate the Ebitda, right? Incredible. You can make the same point for many other large oils,” said Della Vigna.

The EBITDA is a standard metric which refers to the benefits of a company before interest, taxes, depreciation and amortization.

“The third option is that BP is an energy company centered on the United States – and it is clear, right? BP is the most American – of all majors, more than Exxon and Chevron,” said Della Vigna, noting that 40% of BP cash flows come from the United States

“Thus, being listed in the United Kingdom, when the United Kingdom obliges you to discount of any other region in Big Oil, does not feel well. I think that a form of relocation or transatlantic fusion can be interested,” he added.