BP’s Failed Attempt to Greenwash Itself Into Relevance Results In Shell’s Buyout Target (Historic)

So it appears, Shell is circling BP like a vulture circle's roadkill. The conversations are happening, presumably behind closed doors, over polished mahogany tables, with lawyers pretending this is just another Monday. But it isn’t just another Monday. It’s a potential $200B oil industry consolidation that would rattle the very foundation of the Black Gold industry. 

(Source: Giphy) 

In short, BP is not in a good place. The company basically tried to pivot from oil to people pleasing, bet the farm on net zero posturing, and then, surprise, got its a$$ handed to it by the market. The strategy was incoherent, the execution worse, and now the company’s worth less than a third of Shell. Its former CEO imploded in a scandal that was so weirdly British it almost felt scripted (didn’t disclose board-inappropriate relationships with colleagues—plural). His replacement, Murray Auchincloss, is trying to “reset” the company, which is mainly backpedaling on all climate talk and praying the shareholders don’t riot.

Spoiler: They are rioting anyway. Elliot Management, for instance, now owns 5% of BP and is already whispering sweet threats into the boardroom about layoffs and cash returns. The company’s stock is down nearly 30% in a year. Profits in Q1 were sliced in half, and now BP is more congruent with hospice than it is oil. 

(Source: Yahoo Finance) 

Shell, meanwhile, has been doing what actual oil companies do: selling oil. Real oil. Dirty oil. Profitable oil. Their shares have nearly doubled in five years because they didn’t pretend to be a solar company. CEO Wael Sawan is now playing the “we’re just exploring options” game, as reports indicate a potential buyout. 

Of course, Sawan nonchalantly says buybacks would be the better move with their cash holdings. Which they are… until they aren’t. Meaning, it’s more than likely that Sawan is just saying that to keep activist investors off his a$$ while his M&A team models out whether absorbing BP is less painful than watching Exxon and Chevron laugh their way to trillion-dollar valuations.

(Source: The Guardian) 

On the other end, what makes this whole thing more obscene is the political landmine it would trigger. Britain’s two biggest oil giants fusing into one? Regulators would have a complete meltdown. Parliament would have a collective aneurysm. Climate NGOs would chain themselves to Shell HQ. And yet, it would still be pushed and pushed, because money doesn’t care about your feelings, and Shell wants more barrels, more assets, and more leverage in a world that increasingly doesn’t care about ESG promises made during Covid.

So yeah, as of right now, talks on Shell’s side are on the table. And if BP’s stock drops further, if oil prices keep sliding, if Elliott keeps setting fires… they’ll do more than talk. They’ll move. Because you don’t leave a rival gutted in the street unless you’re afraid the mess might splash back on you. And right now? Shell doesn’t care if it gets messy. They just want to consume both oil and its competitors.

(Source: Giphy) 

Of course, do what you will with this information. These are only talks for now, but don’t expect a major announcement of a buyout to hit the headlines some time soon. Meaning, place your bets accordingly and stay safe out there, friends. Until next time… 

P.S. Oh, I’m sorry, I didn’t know you liked getting rekt. Let’s face it, retail investors get the short end of the stick all day everyday. It’s the smart money’s world, and we are just living in it–only useful when it comes to liquidity purposes in the market. Meaning, if you’re as pissed off as I was when I found out Milli Vanilli was lip syncing the whole time, then it’s time to go from investing blind, to investing smart. Luckily for you, the key is right here as a Stocks.News premium member. Click here to see exactly how our premium members are printing while others quake in the face of today’s market chaos. 

Stocks.News holds positions in Exxon Mobil as mentioned in the article.