Business
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.
By Kamel Al-Harami
Independent Oil Analyst
Undersecretary of the Kuwaiti Ministry of Finance, Aseel Al-Munifi
KUWAIT CITY, Sept 9: Undersecretary of the Kuwaiti Ministry of Finance, Aseel Al-Munifi, on Tuesday emphasized the need to develop the tax system and achieve financial sustainability to promote economic integration among Gulf Cooperation Council (GCC) member states.
Speaking at the 15th meeting of the Committee of Heads and Directors of Tax Administrations in GCC countries in Kuwait, Al-Munifi said the meeting is part of ongoing efforts to coordinate GCC tax authorities and develop mechanisms to unify joint tax policies that serve the interests of member states and their populations.
She expressed hope that the annex to amend the unified excise tax agreement would be signed at the upcoming financial and economic cooperation meeting scheduled in Kuwait next October, which will bring together the GCC finance ministers. Al-Munifi also commended the heads and directors of tax authorities and the Unified Tax System Working Group for their efforts in preparing studies, working papers, and recommendations.
Khalid Al-Sunaidi, Assistant Secretary-General for Economic and Development Affairs at the GCC General Secretariat, said the meeting continues the process of cooperation among GCC countries in tax policies. He noted that the aim is to unify tax frameworks, enhance economic integration, and support competitiveness at the regional and international levels.
Al-Sunaidi added that discussions at the meeting included outcomes from the GCC Unified Tax System Working Group on redefining energy drinks to reduce the consumption of unhealthy products, and plans to establish a comprehensive electronic system for all types of indirect taxes, alongside other related topics.
During the meeting, GCC tax heads and directors reviewed recommendations and decisions from the 14th meeting and previous sessions, submitting them to the undersecretaries of finance in the GCC. It was agreed to form a technical working group to develop the electronic system for indirect taxes and to redefine energy drinks in the Unified Excise Tax Agreement according to international definitions and classifications.
The 15th GCC Tax Committee meeting held in Kuwait.
Kuwait envoy urges using digital tools for peace, recovery
Cabinet approves draft laws on real estate, children
UN Special Rapporteur calls on Kuwait to form women’s ministry
-
Latest News20 hours agoAmir hails medical achievements | Kuwait Times Newspaper
-
Politics21 hours agoKuwait Municipality Cracks Down on Unlicensed Advertisements in Ahmadi
-
Business23 hours agoIndia’s Goods and Services Tax Reforms 2.0: A paradigm shift
-
Latest News23 hours agoGCC countries remain committed to combating money laundering
-
Business21 hours agoAsian shares trade mixed as focus shifts to Fed’s next move
-
Latest News10 hours agoCommittee reviews efforts to counter cyber threats
-
Business19 hours agoKuwait aims to attract value-added direct investments
-
Politics19 hours agoIllegal Mobile Vehicles and Shops Targeted in Kuwait’s Ahmadi Clean-Up Drive