Filenews 12 June 2025
United Arab Emirates oil giant ADNOC is reportedly actively considering acquiring BP's assets, as rumours of a split or takeover of the British energy company are growing.
According to information from Bloomberg, the Abu Dhabi National Oil Company is closely monitoring developments and may be mainly interested in BP's liquefied natural gas (LNG) assets, although it has reportedly even considered a full takeover of the company.
Any potential deal is expected to be made through XRG, ADNOC's international investment arm, which was founded last year to acquire strategic energy assets globally.
BP at the center of a potential deal – Interest from Shell, Exxon, Chevron
BP's prolonged stock market underperformance against its competitors has made the company a target for takeover. Shell, as well as U.S. giants ExxonMobil and Chevron, have also been touted as potential suitors. Although BP is attempting to maintain control of its strategy, the pressures are intensifying.
Chief executive Murray Auchincloss assured in April that BP was on an "excellent start" to implementing its new strategic plan, which envisages a shift to traditional hydrocarbon production and limiting investment in renewables.
Regrouping forces: Oil investments, asset sales and debt reduction
As part of this strategy, BP plans to increase annual oil and gas spending to $10 billion by 2027, while targeting $20 billion in divestments. in the coming years. At the same time, it is drastically limiting its investments in RES, responding to the pressure of shareholders who demand an improvement in cash flow and debt reduction.
Allen Good, an analyst at Morningstar, comments that a full split of BP is unlikely, since management continues to strategically invest in production and exploration, with the aim of maintaining a balance between conventional and "green" activities.
For ADNOC and its subsidiary XRG, a potential deal with BP would strengthen the UAE's international presence in the LNG market, against the backdrop of the ambition to reach $80 billion in business value through strategic acquisitions. As Sultan al-Jaber, a leading figure at ADNOC, had stated: "We are determined to strengthen Abu Dhabi's role as a world leader in the energy and chemicals sector."
Difficult to negotiate
AJ Bell's Russ Mould reckons that any negotiation between ADNOC and BP will be difficult, as both sides attempt to defend their strategic interests. BP is under pressure to reduce its debt through organic flows and sales, which ADNOC will likely use to negotiate hard, especially if it is interested in valuable assets such as LNG projects.
