Possible merger between bp and Shell

General – Merger

Several Western media have recently reported on the possibility of a merger between bp and Shell.

Over the past year, bp’s share price has fallen by 2%, and its market capitalisation has fallen to £74bn, while Shell’s has risen by 9%, reaching £164bn. A merger between the two companies would allow the new energy giant to overtake the US company Chevron regarding market capitalisation.

The possibility of bp being acquired by Shell has been discussed in the past, particularly in 2012, when BP was considered a potential target for acquisition by companies such as ExxonMobil and Shell. However, as of February 2025, there is no confirmed information about such plans or negotiations.

A merger of such large energy companies would require careful consideration of multiple factors, including antitrust regulations, strategic objectives, and shareholder approval. Without official statements or reliable sources confirming such intentions, it is difficult to assess the likelihood of such an acquisition.

If Shell were to take over bp, it could have a significant impact on production and exports in the Caspian Basin, especially in the context of Kazakh oil exports via Azerbaijan.

Shell would have signed a new contract to develop the Karabakh oil field in the Azerbaijani sector of the Caspian Sea. It would also have accelerated the Dostlug oil and gas production project on the border of Azerbaijan and Turkmenistan.

Given that Shell has sufficient capital and high-tech solutions for offshore gas production, the Shah Deniz-3 project would have been implemented at a faster pace.

In addition, Shell has production assets in Kazakhstan.

Shell is one of the largest foreign investors in Kazakhstan’s oil and gas industry. It has a 16.81% stake in the giant Kashagan oil field development project and a 29.25% stake in the Karachaganak (Karachaganak Petroleum Operating (KPO) gas condensate project.

Control of bp would give Shell additional leverage in the region, especially if the company focuses on developing alternative oil export routes through the Caspian.

A takeover of bp by Shell would consolidate the Western presence in the Caspian Basin. It would give Shell control over key Caspian oil export routes, which is especially important given changing global energy flows. Kazakhstan would likely use this to increase oil supplies through Azerbaijan, reducing its dependence on Russian pipelines.

Original text: Ilham Shaban, Caspian Oil and Gas Analyst.

Original Source: https://ocean-energyresources.com/2025/02/17/possible-merger-between-bp-and-shell/