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BP Doesn’t Have Merger Fever As US Shale Race Heats Up

Dudley BP

As the acquisition war rages on over Anadarko, some analysts are suggesting that there will be additional mergers and acquisitions as major oil companies seek to increase their foothold in the US shale hotspot, the Permian Basin—but BP’s CEO Bob Dudley said on Wednesday that BP wasn’t currently on the hunt for oil and gas deals, according to CNBC, and wasn’t interested in Anadarko.

BP has already made its move into US shale when it acquired last year assets of BHP Billiton worth US$10.8 billion. BHP unloaded the assets at a time when it was booking losses thanks to the 2014 price crash. This suggests that BP is not reluctant to take a piece of the US Shale pie, rather that it has already had its fair share in what Dudley at the time considered a “transformational” move.

BP snagged BHP’s assets in not only the Permian, but also in the Eagle Ford and Haynesville basins as well, increasing its presence in US onshore oil and gas by more than half. While BP may be done with its acquisitions, CEO Dudley expects that other companies will continue to swap land and consolidate holdings as players in primarily the Permian look to cut costs.

Anadarko, the most recent asset that has more than one suitor, has become a hot topic as first Chevron, then Occidental threw their hats into the ring to acquire the company with a large presence in the Permian. Anadarko had a preliminary deal with Chevron, but is rethinking the deal as Occidental’s bid topped Chevron’s, with Warren Buffett backing Occidental’s bid with $10 billion. 

While mergers and acquisitions may increase in the coming months, the reality so far is that the value of US oil and gas mergers and acquisitions fell to a ten-year low in Q1, falling by a whopping 93% to $1.6 billion, according to Drillinginfo in its quarterly M&A review as reported by Reuters in early April.

By Julianne Geiger for Oilprice.com

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