The global energy sector is abuzz with speculation following reports suggesting that Shell is evaluating a potential takeover of BP. While no formal move has been made, Shell is said to be working with advisers to assess the feasibility of such a deal, awaiting further declines in BP’s stock and oil prices before deciding whether to act. According to Bloomberg, sources familiar with the matter emphasize that deliberations remain in early stages and that Shell may ultimately choose to continue its strategy of share buybacks and smaller acquisitions instead.
If realized, the acquisition would mark one of the largest in oil and gas history, merging the UK’s two energy giants into a behemoth potentially rivaling ExxonMobil and Chevron in scale. BP, with a market capitalization of approximately $74 billion, is significantly smaller than Shell’s $211 billion valuation, as reported by Bloomberg. Recent underperformance, driven by a controversial net-zero pivot under former CEO Bernard Looney and lackluster investor confidence under current chief Murray Auchincloss, has left BP vulnerable. As The Guardian noted, BP’s shares have fallen by over 30% in the past year, while profits halved in the first quarter of 2025.
The deal would not only reshape the European energy landscape but would almost certainly invite scrutiny from regulators and antitrust authorities. According to Bloomberg, other energy players are also reportedly considering BP as a potential target, with Elliott Investment Management already increasing its stake to more than 5% and pressuring BP for deeper cost cuts and a more aggressive strategy shift. Elliott’s involvement, detailed by both Bloomberg and Reuters, reflects a broader investor frustration with BP’s current direction and raises the possibility of competitive bids or activist-led structural changes.
Shell, for its part, remains cautious. CEO Wael Sawan emphasized in a recent call with analysts that any acquisition would need to deliver clear value, stating that Shell’s priority remains maximizing shareholder returns, notably through buybacks. “Today, value hunting, in my view, is buying back more Shell (stock),” Sawan said, as quoted by Bloomberg. Meanwhile, a Shell spokesperson told the company remains focused on “performance, discipline and simplification,” declining to directly confirm any acquisition plans. BP has similarly declined to comment on the speculation.
Whether this speculation evolves into a concrete bid remains uncertain, but the strategic logic is evident. A Shell-BP merger could allow Shell to regain exposure to the U.S. market and strengthen its upstream portfolio, especially after divesting from the Permian Basin in 2021. As oil majors navigate energy transition pressures and activist investor scrutiny, consolidation may increasingly be seen as a path to scale, resilience, and profitability. For now, the market watches and waits, uncertain but intrigued.
