Shell is reportedly considering a takeover bid for fellow supermajor BP, which has seen its fortunes dim recently after its rather premature bet on a fast energy transition. The report comes from Bloomberg, which quoted unnamed sources familiar with the developments.
The Financial Times, meanwhile, quoted Shell’s chief executive, Wael Sawan, as saying he would rather buy back Shell’s own stock than take over BP. “We will always look at these things, but you are also looking to see what the alternative is,” Sawan told the FT. “Right now, buying back Shell [shares] for us continues to be absolutely the right alternative to go for.”
“As we have said many times before, we are sharply focused on capturing the value in Shell through continuing to focus on performance, discipline and simplification,” a Shell spokesperson told Bloomberg in an emailed response to the report.
The Bloomberg sources, however, said the supermajor was studying a takeover that would depend on whether the BP stock will continue to decline, after shedding close to 30% over the past 12 months. At the same time, the sources added that nothing was certain and Shell might eventually decide to focus on share repurchases and bolt-on acquisitions, the Bloomberg report said.
BP reported a net profit of $1.38 billion for the first quarter, missing analyst expectations and booking a 49% annual decline in its net result. It also said it would spend $750 million on share buybacks.
Shell, meanwhile, reported stronger than forecast net figures for the first quarter, at $5.58 billion, which was down 28% on the year. The supermajor also said it would spend $3.5 billion on stock repurchases over the second quarter of the year.
Shell currently has a market value that is twice as high as BP’s, at close to $200 billion versus BP’s $74 billion.
By Irina Slav for Oilprice.com
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