Shell 'weighs BP takeover' amid renewable energy retreat
Shell said to be examining merits of acquisition of giant rival whose strategy shift from net zero has yet to convince investors
Shell is evaluating the possibility of a takeover of rival oil supermajor BP, according to reports.
As well as being a blockbuster deal for the fossil fuel sector, any Shell-BP merger would unite two energy giants whose recent fortunes have been bound up with shifts towards – and then away from – renewables and a net zero strategy.
Shell and BP under former CEOs Ben van Beurden and Bernard Looney respectively launched concerted pushes into the power sector, with a focus on areas such as offshore wind and solar, and set stretching decarbonisation targets for their businesses.
The world shifted on its axis after Russia’s invasion of Ukraine in 2022 when oil prices surged and investors began questioning the wisdom of pursuing the lower returns available from renewable energy projects.
Van Beurden’s successor at Shell, Wael Sawan, in 2023 signalled a hard and early pivot back to oil and gas that saw a wholesale exit from sectors such as floating wind power, where the fossil group had just a few years earlier promised to be a global leader.
While investors and the share price responded favourably to Shell’s retreat from green, they have been less convinced by BP’s. Shell’s market capitalisation is currently $199bn compared to BP’s $75bn.
Despite their dash back to oil and gas, both BP and Shell still contain significant renewable energy operations, such as BP’s Lightsource solar unit and interests in the JERA BP joint venture, and Shell's offshore wind operations in the Dutch North Sea.
BP declined to comment while Shell told the financial news agency that it is “sharply focused on capturing the value in Shell through continuing to focus on performance, discipline and simplification”.
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