Speculation of BP takeover after Abu Dhabi ponders bid
SHARES in BP jumped yesterday after it became the target of takeover speculation.
The boost came following reports the
Abu Dhabi National Oil Company recently considered a bid.
According to Reuters, the stateowned oil company ultimately decided BP would not be the “right fit”. Politics were also likely to be a factor.
However, it raised the prospect that BP – a crown jewel in the FTSE 100 – could yet be snapped up.
The £88billion company has lagged behind competitors for years, which investors and analysts say has made the British firm a potential takeover target.
US oil giants are in the midst of the industry’s biggest consolidation for decades, but European oil majors are yet to be involved.
Investors have penalised BP’s plan to reduce fossil fuel production and its faster shift toward renewables than rivals such as Shell, Exxon and Chevron.
In February last year, BP watered down its more aggressive energy transition plans. In contrast, the Abu Dhabi National Oil Company (ADNOC) has increased oil and gas production capacity. Chief executive Sultan al-Jaber is seeking to reshape the state giant in the image of a global oil major. Reuters claimed ADNOC and BP spoke directly in recent months. ADNOC also sought advice from investment banks on a potential deal, it said. The Emirati giant is reported to have considered all options when looking at BP, including buying a big stake but “it didn’t go far”, a source said. ADNOC has also looked at other international companies to give it access to a bigger gas and liquefied natural gas portfolio, it was claimed. BP and ADNOC refused to comment. BP’s UK shares rose by 2.5% in early trade to 533.9p per share, their highest level since October.