BP shares (LSE: BP) climbed 1.5% in London morning trading despite growing speculation about the oil giant becoming a takeover target.
The £55 billion company has underperformed its rivals significantly, with its share value falling 18% year to date compared to Shell’s 6% drop and the roughly 4% decline seen at American rivals ExxonMobil.
This performance gap has fuelled industry talk about potential buyers. Shell, ExxonMobil and Chevron all feature in analyst discussions according to CNBC, though each possible combination faces substantial obstacles. A Shell-BP merger would likely trigger regulatory concerns, while Chevron might only consider BP if its £53 billion pursuit of Hess falls through.
BP’s troubles stem from its abandoned green energy strategy under former CEO Bernard Looney and subsequent pivot back to fossil fuels led by Murray Auchincloss. This strategic reset aimed to rebuild investor confidence but followed years of underperformance.
US hedge fund Elliott Management has reportedly built a near 5% stake in BP, putting intense pressure on the board. Chairman Helge Lund has already announced plans to step down, likely in 2026.
BP faces additional challenges including exposure to Donald Trump’s recent tariff announcements, which sent oil prices tumbling from nearly $75 to below $60 per barrel. The company also recently warned investors about lower-than-expected gas production, weak trading results, and a £3 billion increase in net debt during the first quarter.
As BP prepares for its annual general meeting on Thursday, questions remain about its future direction and whether its strategy reset will be enough to fend off potential suitors or satisfy activist investors. BP’s first-quarter results, due on 29 April, will be closely scrutinised for signs of a turnaround strategy that might restore investor confidence in this struggling energy giant.