Latest news with #Shell
Daily Mail
4 hours ago
- Business
- Daily Mail
Labour prepared to approve BP takeover by Shell
The Government would be prepared to approve a takeover of BP by its larger rival Shell rather than allow it to fall into overseas hands. The informal guidance in Whitehall was provided before last week's reports that Shell was in early-stage talks about a possible takeover of its weaker competitor. Shell issued a statement to the stock exchange saying that no such talks were taking place. Under Britain's strict takeover rules, it is not permitted to make an offer for six months. It would require BP to invite Shell into the process should there be a bid from other sources. City investment bankers have been floating the idea of a Shell-BP deal to create a London-based European oil champion on the scale of the American behemoths for some months. Such a transaction would inevitably require scrutiny by anti-trust authorities on both sides of the Atlantic. Shell chief executive Wael Sawan publicly has made it clear that his target is to keep returning funds to shareholders through dividends and buybacks, which have been running at £3 billion a quarter. A takeover of BP is seen at Anglo-Dutch Shell headquarters as a distraction from its core mission. Nevertheless, the company felt it necessary to take informal soundings with Ministers and officials, should the opportunity to become involved with BP arise. Shell's last major UK takeover came when it bought BG Group, once the exploration arm of British Gas, for £46 billion a decade ago. Shell, with a stock market value of £150 billion, has accelerated away from BP in recent years. With a valuation of less than half that, BP would be easy pickings for most of the big oil firms. Investor interest in big oil has increased since Donald Trump returned to the White House with his 'drill, baby, drill' mantra. The open hostility of Keir Starmer's Government to fossil fuels has also softened in recent weeks. The 12-day war between Israel and Iran has been a sharp reminder of how important oil and gas is to the UK's energy and national security. BP's low valuation of £58.8 billion makes it an attractive takeover proposition for its rivals. It has been beset by problems in the boardroom, in Russia and in the newly named Gulf of America. It carries net debt of £20 billion on its balance sheet. BP is seeking to refocus on oil and gas exploration and production after flirting with becoming a carbon-zero energy group under Bernard Looney, who left under a cloud in 2023. Current chief executive Murray Auchincloss has set a challenging target to reduce net debt to £14 billion by 2027. It is also under pressure from activist investor Elliott Capital Management to improve early returns even if it means cutting back on capital investment. However, it is not clear that the big American oil companies would be interested in buying BP. Exxon Mobil is very focused on the Americas, having struck black gold in the Guyana basin. It is also deeply involved in drilling, fracking and extraction of natural gas in the Permian Basin in Texas and New Mexico with its $64 billion (£47 billion) takeover of Pioneer Natural Resources. Rival Chevron also has been doubling down on domestic development and is pursuing a $50 billion takeover of Hess Corporation, although this has been bogged down in an arbitration process. As the former Anglo-Persian oil company founded in 1909, BP has a long history of global exploration and good relations with the British Government. It has lost none of its adventurous nature and has been developing new production and markets in Azerbaijan, India and Indonesia and is a big investor in Iraqi production. The Government will fear for the fate of such a vital flag-flier for Britain at home and abroad, and for the risk to jobs, exports and oil trading should it fall into overseas hands. A loss of its London stock exchange quotation would be a devastating blow to the UK. Some City advisers have been alerted that their services will be needed should, for any reason, the current six-month cooling-off period on a Shell-BP transaction be interrupted.
Arab Times
7 hours ago
- Business
- Arab Times
Shell to take over BP? Is it about to happen?
FOR the past six months, financial newspapers in the UK and around the world have been focused on two major oil companies - Shell and BP. Today, however, the two companies are reportedly engaged in serious discussions. One company has declined to comment, while the other has remained silent. The British press is generally supportive of a takeover by Shell, emphasizing that as a British company, Shell represents a 'Jewel in the Crown' that should remain under British ownership rather than being acquired by a foreign entity. Meanwhile, BP is struggling to keep pace with its peers and has been divesting parts of its core business, such as Castrol lubricants. BP may have made a critical error by moving too quickly away from oil and gas towards alternative energy sources like wind and solar, aiming to lead the energy transition. This shift left the company lagging and weakened, making it vulnerable to acquisition. Over the past 12 months, BP's share price has dropped by 22 percent. At its peak, BP was so powerful it could influence governments and interfere in domestic politics in some parts of the world. Today, all of that is history, as BP is now searching for potential buyers. Shell is a British multinational oil and gas company listed on the London Stock Exchange, making it a good fit to acquire BP due to their similar cultures. The main difference is that Shell started as an oil trading company, while BP, through the British Empire, acquired oil and gas fields in some of the richest hydrocarbon countries in the world, including the Arabian Gulf, starting in Bahrain, Iran, Iraq, and Kuwait. Interestingly, BP chose not to invest in Kuwait, claiming it already had too much oil under its control. Shell, however, has stated it has no intention of making a takeover offer for BP and has denied claims of being in active merger talks. It may be taking its time to decide, possibly waiting for other companies to submit bids before evaluating its own offer. Given the similarities and synergies in place, Shell is well-positioned to make an offer. If the acquisition is completed, Shell would become the largest oil company, surpassing ExxonMobil and Chevron. BP's current market value is estimated at around $80–83 billion, while Shell is valued at approximately $200 billion, nearly three times BP's worth. How far and for how long the talks or speculation surrounding a potential BP takeover will continue remains uncertain. The ongoing rumors are creating volatility and may further weaken BP's position, potentially contributing to a decline in its market value. Other oil giants, such as the Abu Dhabi National Oil Company (ADNOC), are reportedly exploring the possibility of acquiring parts of BP. However, ADNOC appears more interested in acquiring specific segments of the company rather than taking over BP as a whole. BP, as a global energy giant, does not align entirely with ADNOC's structure. It is significantly larger, with a wide array of operations and an expansive international footprint, which would make full acquisition and management a difficult task. In a few days, we may learn the outcome of these discussions and whether Shell intends to move forward with a takeover. BP appears poised for acquisition, but it needs the right partner, one capable of unlocking the full benefits of potential synergies. Undoubtedly, Shell is the most prepared and best positioned to take over. For other international oil companies, acquiring and managing one of the historic 'Seven Sisters' would be a significant challenge. Shell, on the other hand, seems to be taking its time to determine the right price before making a move to acquire its longtime peer and competitor.
Yahoo
9 hours ago
- Business
- Yahoo
Shell (SHEL) Advances Share Buyback Program with $63.8 Million Purchase
Shell plc (NYSE:SHEL) is one of the 11 best European stocks to invest in. On June 24, the company confirmed the repurchase of 3.3 million shares across multiple trading avenues. The repurchase is part of the company's push to return value to shareholders. The repurchase is also part of Shell's buyback program, announced on May 2, 2025. The program is scheduled to continue through July 25, 2025, with BNP Paribas managing trading decisions independently. The transactions are executed through on-market and off-market mechanisms. The continued repurchase of shares affirms a strong commitment to capital return for shareholders. Shell plc (NYSE:SHEL) is a global energy company headquartered in the UK. It explores for, produces, refines, and markets oil and natural gas, while also manufacturing chemicals and lubricants. Its key businesses include Integrated Gas, Upstream, and Downstream, with growing investments in low-carbon energy sources such as biofuels, hydrogen, and electric vehicle charging. While we acknowledge the potential of SHEL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
9 hours ago
- Business
- Yahoo
Shell (SHEL) Advances Share Buyback Program with $63.8 Million Purchase
Shell plc (NYSE:SHEL) is one of the 11 best European stocks to invest in. On June 24, the company confirmed the repurchase of 3.3 million shares across multiple trading avenues. The repurchase is part of the company's push to return value to shareholders. The repurchase is also part of Shell's buyback program, announced on May 2, 2025. The program is scheduled to continue through July 25, 2025, with BNP Paribas managing trading decisions independently. The transactions are executed through on-market and off-market mechanisms. The continued repurchase of shares affirms a strong commitment to capital return for shareholders. Shell plc (NYSE:SHEL) is a global energy company headquartered in the UK. It explores for, produces, refines, and markets oil and natural gas, while also manufacturing chemicals and lubricants. Its key businesses include Integrated Gas, Upstream, and Downstream, with growing investments in low-carbon energy sources such as biofuels, hydrogen, and electric vehicle charging. While we acknowledge the potential of SHEL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure: None.
Mint
11 hours ago
- Business
- Mint
Inside the Trading Desks that Surfed 12 Days of Oil Market Mayhem
Traders watched with alarm as US jets bombed a major Middle Eastern oil producer. An initial surge in the price of crude turned into a rout as soon as they realized that oil flows would continue unaffected. The year was 1991, and the US bombing campaign was against Saddam Hussein's Iraq. In just one night, prices collapsed by 30%. Three decades later, oil traders are picking up the pieces from a 12-day rollercoaster ride that saw prices surging and tumbling in the most manic period of oil trading since Russia invaded Ukraine in 2022. Once again, traders spent nights glued to their desks, joining conference calls in the early hours of the morning and relentlessly working government and military connections for intelligence to give them a trading edge. Just like in 1991, early spikes quickly turned into routs as traders focused on the reality of whether oil would keep flowing. And it did. The past fortnight has provided stark evidence of the psychological shift in a market long haunted by memories of cataclysmic price moves driven by Middle Eastern conflict in the 1970s and 1980s. For today's oil traders, headlines about bombs falling have increasingly become an opportunity to sell. 'Markets today are lot more resilient to news — they go straight to the issue of whether there will be a supply disruption or not, against the backdrop of how much spare production capacity exists,' said Mike Muller, the former head of Vitol Group in Asia and former head of crude trading at Shell Plc. Muller recalls, as a young trader on Shell's oil futures desk, trading through the night of Jan. 16, 1991, only leaving his desk in the morning when his bosses ordered him to go home. Shell had decided to sell into any rally, and Muller sold cargo after cargo as the market surged then collapsed. Today's traders, much like those in 1991, have spent the past two weeks wrestling with the prospect of the type of supply disruption that only happens once in a generation: an interruption to the Strait of Hormuz chokepoint that ships about a fifth of the world's oil. Traders on some desks in Geneva and London worked in shifts to ensure 24-hour coverage — though in reality many stayed awake anyway, scrolling social media feeds and joining emergency calls at 3 a.m. as rumors flew. As traders tried to work out whether this time was different, they honed in on satellite images over Iran and Hormuz, where not only was there no disruption, but if anything oil flows looked higher. Off the coast of Iran each day, a steady flow of tankers were picking up the country's barrels and sailing off into the ocean. While Tehran's empty ships had scattered — likely for security reasons — Iran's oil was flowing at a rate about 40% higher than the average for the rest of the year. Still, while traders today have a massive amount of digital information at their disposal, from real-time satellite images to second-by-second 'crowd reporting' on social media, some of the world's top physical oil traders emphasized how they'd spent the past two weeks hunting intel the more old-fashioned way: tapping connections in Washington, Israel and elsewhere for a sense of the war's direction and Iran's ability to respond. That intel helped harden convictions that the US would enter the fray, and that Iran wouldn't shut down Hormuz, they said. One senior executive said he told staff to follow Donald Trump's social media posts as a guide for what to do next. On June 16, the president posted on his Truth Social site: 'IRAN CAN NOT HAVE A NUCLEAR WEON.' As the rapid pace of headlines meant trading crude futures suddenly got much riskier, money poured into the options space, where traders are able to take out insurance against a spike at a cheaper cost than trading futures. There, markets were moving so fast that traders and brokers were constantly having to re-price deals or risk losing business as each fresh headline signaling escalation pushed volatility and the cost of buying such insurance higher, people involved in the market said. Record volumes of options changed hands, and the total amount traded over just seven working days was the equivalent normally seen in several months. 'In times of geopolitical risk traders move to the options market rather than the futures market,' said Nicky Ferguson, head of analytics at Energy Aspects Ltd. 'We haven't seen much change in discretionary hedge fund futures positions over the last month, but their bullish options exposure exploded.' Tellingly though, traders weren't placing wagers on an astronomical rise in prices at the same pace they have in previous rallies. Even when hostilities between Iran and Israel cooled after attacks in October last year and some contracts had expired, there were still about 130,000 Brent $100 calls outstanding for the next six trading months. Right now those wagers are about 60% of the size they were back then. While all of the oil market's cogs were suddenly whirring, diesel flows were among those most threatened by any potential disruptions in Hormuz. Prices surged from $85 to $110 a barrel as traders who had been wagering on a global growth slowdown were forced to cover their positions, people involved in the market said. Meanwhile, on Singapore's physical oil-trading desks, where barrels from the Middle East are generally bought and sold for refiners in Asia, an uncanny quiet emerged. There, trading of spot cargoes virtually ground to a halt at what would normally be the busiest time of the month, as traders waited to see what happened next. For derivatives traders, the conflict was punctuated by two weekends that created moments of drama and tough trading decisions. When markets reopened on June 16, prices spiked briefly before retreating as traders focused on the uninterrupted oil flows. A week later, the stakes were even higher after the US bombed Iranian nuclear sites over the weekend. Yet oil production and trade remained unaffected. Some traders were glued to a newly launched weekend retail product, trying to parse whether it could accurately forecast Monday's trading. Others confidently told clients prices were about to fall, while some described privately how they spent Sunday gearing up to sell at the open, but lost their conviction as Iran vowed revenge. Prices spiked as trading began. Yet it wasn't long before the market followed Muller's cue from 1991: Sell, sell, sell. Iran's muted response to the US bombs sent prices plunging, and by the time crude opened on Tuesday morning it was more than $10 below the level it touched when trading began a day earlier. The oil market's new mantra was clearer than ever: selling oil's geopolitical spikes had worked again. The First Gulf War 'set the bar for what we now refer to as supply risk premium,' said Muller, the veteran trader. 'From that time onwards the trading community has been happy to place their bets on air defences prevailing.'
