By Brian Swint

Shares of U.K. oil-and-gas company BP were rising on Friday after another report surfaced about a possible takeover of the firm.

All of the company's biggest rivals -- Exxon Mobil, Chevron, Shell, and TotalEnergies, as well as Abu Dhabi's Adnoc -- have run the numbers on whether making a bid for BP would make sense, the Financial Times reported, citing unidentified people in the industry. BP declined to comment.

BP is vulnerable because it has significantly underperformed peers for the past five years. In February, CEO Murray Auchincloss unveiled a reset of the company's strategy, which aims to refocus the company on growing oil and gas production, rather than renewable or low-carbon energy. Activist investor Elliott Management has taken a 5% stake in the company and is pushing for more aggressive goals to get the company back on its feet.

American depositary receipts for BP rose 3% to $29.44 on Friday. The stock is still down more than 20% over the past 12 months.

BP has relatively high levels of debt that prompted it to scale back its program for buying back shares in the current quarter. The revival is has become even harder with slumping oil prices, which are currently around $60 a barrel and could sink to $50 in the coming months.

Shell -- BP's crosstown rival in London and the buyer that would likely face the least resistance from the U.K. government if it made a bid -- was asked about the possibility of moving on BP after its earnings on May 2. CEO Wael Sawan said he's more interested in buying back Shell shares for now.

Shell and France's TotalEnergies might like to take on BP's natural gas assets, but might find that acquiring a firm the size of BP to be unwieldy. Exxon and Chevron are currently in a dispute over Chevron's proposed takeover of U.S. rival Hess, which jointly runs a lucrative project off the coast of Guyana with Exxon.

So while BP might be vulnerable at the minute, any companies big enough to make an offer for it appear to be busy with other things. Still, the rumors of another megamerger in the oil industry aren't going away.

Write to Brian Swint at brian.swint@barrons.com

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May 09, 2025 11:35 ET (15:35 GMT)

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