BP emerges as acquisition target
BP has become a potential takeover target for some of the world's largest oil companies, according to industry reports. The British energy giant's declining share price has left it vulnerable to acquisition, with Shell, Chevron, ExxonMobil, TotalEnergies, and Abu Dhabi National Oil Company (ADNOC) all reportedly examining the numbers for a potential deal.
The speculation comes after a turbulent period for BP, which saw its stock trade around $35 per share in late 2025, significantly underperforming its rivals.
Strategic reset fuels speculation
In February 2025, BP announced what it called a "fundamental reset" of its strategy. The company abandoned its ambitious clean-energy plans and renewed its focus on fossil fuels, aiming to boost U.S. oil and gas production by more than 50% by 2030.
The strategic U-turn came after disappointing returns on green energy investments, a pattern that has played out across the industry. BP is now increasing oil and gas spending by 25%, joining peers in prioritizing traditional energy assets.
Potential suitors and their motivations
Each potential acquirer brings different strategic interests:
- Shell: Fellow European major could consolidate market position and achieve significant cost synergies
- ExxonMobil: America's largest oil company continues aggressive expansion after its $60 billion Pioneer Natural Resources acquisition
- Chevron: Still awaiting regulatory approval for its Hess acquisition, but has balance sheet capacity for major deals
- TotalEnergies: French major could strengthen its global portfolio and LNG position
- ADNOC: Abu Dhabi's state oil company has been actively expanding internationally
Industry context
The major oil companies are all increasing fossil fuel investments after green energy ventures failed to deliver expected returns. Shell CEO Wael Sawan recently acknowledged headwinds in the supply-demand fundamentals going into 2026, noting a highly credible scenario of oversupply.
Meanwhile, ExxonMobil updated its corporate plan through 2030 in December 2025, projecting stronger earnings and cash flow from advantaged assets. The company remains on track to repurchase $20 billion of its shares, with plans to maintain that pace through 2026.
Chevron CEO Mike Wirth stated that despite changing market conditions, the company's resilient portfolio and strong balance sheet position it to deliver industry-leading free cash flow growth by 2026.
Market dynamics
The potential consolidation comes as the industry faces an uncertain outlook. The U.S. Energy Information Administration forecasts Brent crude averaging approximately $55 per barrel in 2026, with global supply expected to outpace demand.
U.S. crude production is projected at around 13.5 million barrels per day next year, as growth in the Permian Basin continues. ExxonMobil recently achieved record Permian production of 1.7 million barrels of oil equivalent per day, while Chevron produced 1.06 million barrels daily in the region.
What to watch
Any major acquisition would face significant regulatory scrutiny, particularly in Europe and the United States. A Shell-BP combination would create an energy giant with massive North Sea and global LNG assets, while an ExxonMobil acquisition would further consolidate American dominance in the industry.
For now, BP remains focused on executing its strategic reset, but the company's depressed valuation continues to attract attention from rivals with deep pockets and ambitious growth plans.