Environment

Oil giant BP is seen as a prime takeover target. Is a blockbuster mega-merger in the cards?

Published

24 hours ago

April 15, 2025

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BP logo is seen at a gas station in this illustration photo taken in Poland on March 15, 2025.

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Oil giant BP has been thrust into the spotlight as a prime takeover candidate — but energy analysts question whether any of the likeliest suitors will rise to the occasion.

Britain’s beleaguered energy giant, which holds its annual general meeting on Thursday, has recently sought to resolve something of an identity crisis by launching a fundamental reset.

Seeking to rebuild investor confidence, BP in February pledged to slash renewable spending and boost annual expenditure on its core business of oil and gas. CEO Murray Auchincloss has said that the pivot is starting to attract “significant interest” in the firm’s non-core assets.

BP’s green strategy U-turn follows a protracted period of underperformance relative to its industry peers, with its depressed share price reigniting speculation of a prospective tie-up with domestic rival Shell. U.S. oil giants Exxon Mobil and Chevron have also been touted as possible suitors for the £54.75 billion ($71.61 billion) oil major.

Shell declined to comment on the speculation. Spokespersons for BP, Exxon and Chevron did not respond to a request for comment when contacted by CNBC.

“Certainly, BP is a potential takeover target — no doubt about that,” Maurizio Carulli, energy and materials analyst at Quilter Cheviot, told CNBC by video call.

“I would conceptualize the question of ‘will Shell bid for BP’ in the more general consolidation that it is happening in the resources sector, both oil but also mining — particularly in the past year a lot of companies thought that to buy was better than to build,” he added.

A Shell logo in Austin, Texas.

Brandon Bell | Getty Images News | Getty Images

In the energy sector, for example, Exxon Mobil completed its $60 billion purchase of Pioneer Natural Resources in May last year, while Chevron still seeks to acquire Hess for $53 billion. The latter agreement remains shrouded in legal uncertainty, however, with an arbitration hearing scheduled for next month.

In the mining space, market speculation kicked into overdrive at the start of the year following reports of a potential tie-up between industry giants Rio Tinto and Glencore. Both companies declined to comment at the time.

Never say never, right? I think even Exxon-Chevron in the depth of the pandemic held talks so I think that would have been even wilder to say.

Allen Good

Director of equity research at Morningstar

Quilter Cheviot’s Carulli named Chevron as a potential suitor for BP, particularly if the U.S. energy giant’s pursuit of Hess falls through.

Speculation about a potential merger between Shell and BP, meanwhile, is far from new. Carulli said that while the rumors have some merit, a prospective deal would likely trigger antitrust concerns.

Perhaps more importantly, Carulli added that a move to acquire BP would conflict with Shell’s steadfast commitment to capital discipline under CEO Wael Sawan.

‘An existential crisis’

“Never say never, right? I think even Exxon-Chevron in the depth of the pandemic held talks so I think that would have been even wilder to say,” Allen Good, director of equity research at Morningstar, told CNBC by telephone.

“I wouldn’t take anything off on the table. You know, oil and gas is facing an existential crisis. Now, views differ on how soon that crisis will come to head. I think we’re still decades away,” Good said.

For Shell, Morningstar’s Good said that any pursuit of BP would likely be an attempt to merge the two British peers, as opposed to an outright acquisition — although he said he doesn’t expect such a prospect to materialize in the near term.

The sun sets behind burning gas flares at the Dora (Daura) Oil Refinery Complex in Baghdad on December 22, 2024.

Ahmad Al-rubaye | Afp | Getty Images

Asked about the likelihood of Chevron seeking to purchase BP if a deal to acquire Hess collapses, Morningstar’s Good said he couldn’t rule it out.

“BP certainly doesn’t have the growth prospects that Hess does, but you could get a situation where, again, like I said with Shell, you’d have Chevron acquiring BP, stripping out a lot of costs, certainly the headquarters would no longer be in London … but it doesn’t address the growth concerns ex-Permian for Chevron. So, in that case, I would be a little skeptical,” Good said.

“The issues these companies are facing are to please shareholders, and the two ways to do that really are to reduce costs and return cash to shareholders. So if you can continue to lean into that model somehow, then that’s the probably the way to do it,” he added.

What next for BP?

Michele Della Vigna, head of EMEA natural resources research at Goldman Sachs, described BP’s recent strategic reset as “very wise” and “thoughtful,” but acknowledged that it may not have gone far enough for an activist investor.

U.S. hedge fund Elliott Management has reportedly built a near 5% stake to become one of BP’s largest shareholders. Activist investor Follow This, meanwhile, recently pushed for investors to vote against Helge Lund’s reappointment as chair at BP’s upcoming shareholder meeting in protest over the firm’s recent strategy U-turn. BP has since said that Lund will step down, likely in 2026, kickstarting a succession process.

“I think there are three major optionalities in BP’s portfolio that any activist investor would love to see monetized. The first one is not all in BP’s hands, it’s the monetization of the Rosneft stake,” Della Vigna told CNBC over a video call.

BP announced it was abandoning its 19.75% shareholding in Russian state-owned oil company Rosneft shortly after Moscow’s full-scale invasion of Ukraine in late February 2022. It had marked a costly and abrupt end to more than three decades of activity in the country.

CEO of BP Murray Auchincloss speaks during the CERAWeek oil summit in Houston, Texas, on March 19, 2024.

Mark Felix | AFP | Getty Images

A second optionality for BP, Della Vigna said, is the firm’s marketing and convenience business.

“I mean, within BP, a company that trades on three times EBITDA, there’s a division that can trade at 10 times EBITDA, right? Amazing. You can make the same point for a lot of the other Big Oils,” Della Vigna said.

EBITDA is a standard metric that refers to a firm’s earnings before interest, tax, depreciation and amortization.

“The third option is BP is a U.S.- centered energy company — and it’s clear, right? BP is the most U.S.- exposed of all the majors, more than Exxon and Chevron,” Della Vigna said, noting that 40% of BP’s cash flow comes from the U.S.

“So, being listed in the U.K., when the U.K. gets you the biggest discount of any other region in Big Oil, doesn’t feel right. I think some form of relocation or transatlantic merger may be worth considering,” he added.

Environment

Groundbreaking heavy equipment EVs (ha!) steals the show at bauma

Published

3 hours ago

April 16, 2025

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Groundbreaking heavy equipment EVs (ha!) steals the show at bauma

It only happens every three years, but it’s spectacular! I’m speaking of course, about bauma – one of the largest trade shows of any kind where heavy equipment manufacturers serving construction, forestry, mining, and more bring out their latest and greatest new job site innovations, and we’ve got a whole bunch of them here, on this special bauma edition of Quick Charge!

With more than two million square feet indoors and twice that outdoors, bauma hosts more than 600,000 guests from 200 countries to see 3,600 exhibitors’ hardware (and, increasingly, software). We’re only going to cover a sliver, but it’s a really cool sliver, you guys – enjoy!

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New episodes of Quick Charge are recorded, usually, Monday through Thursday (and sometimes Sunday). We’ll be posting bonus audio content from time to time as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news.

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Environment

Elon Musk goes on Tesla self-driving propaganda spree ahead of TSLA earnings

Published

7 hours ago

April 15, 2025

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Elon Musk goes on Tesla self-driving propaganda spree ahead of TSLA earnings

Elon Musk went on an all-day Tesla self-driving propaganda spree ahead of the company’s earnings, which are expected to be rough.

It’s well known these days that Musk doesn’t often comment on Tesla as he is busy with his government work, buying elections, and running several private companies.

Some Tesla shareholders argue that the CEO is neglecting the public company, which saw its stock tumble this year.

That wasn’t the case today.

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Musk went on a tweeting spree about Tesla, specifically about Tesla’s self-driving effort.

Here are some of the highlights:

Tesla posted that “one day” its vehicles will drive themselves from the factory to new customers and Musk couldn’t stop himself and had to say that it will happen “this year”:

Like most of Musk’s self-driving comments, this one is hard to take seriously since he said the exact same thing in 2018 and claimed it would happen in 2019.

The tweet he was responding to has been deleted by the author, but it asked when Tesla vehicles would drive themselves to customers:

Spoiler alert: regulators are not the bottleneck here.

Musk then claimed that “Tesla self-driving will be far safer than human driving”:

The problem here is that Musk has claimed on many occasions that Tesla’s FSD is already safer than humans, like in 2023: “Supervised FSD is vastly safer than human driving.”

There’s no data that supports that. Tesla refuses to share any data regarding its self-driving program and instead, the company shares a very misleading quarterly “safety report.”

Considering Tesla’s FSD requires supervision from a driver at all times, the driver’s supervision and attention help reduce accidents that the self-driving system wouldn’t necessarily prevent.

Musk also shared positive experiences of a few Tesla owners, including a Tesla engineer and Joe Rogan:

As we often highlight, Tesla’s FSD can be impressive to use, but the problem is when you compare it to its promise, which is in the name: full self-driving.

Under its current form, FSD is still a level 2 advanced driver assist system, and not self-driving, but Musk said that it would become truly “unsupervised” self-driving every year for the last 8 years.

Therefore, it’s not what Musk has been promising buyers for years and as for when it is coming, he has been consistently wrong and has asked owners to rely on anecdotal experiences as Tesla refuses to release any data.

We previously reported that Musk has twice positively referred to a crowdsourced Tesla FSD dataset that shows Tesla’s FSD v13 on HW4 is achieving fewer than 500 miles between critical disengagements.

Tesla has previously stated that FSD must achieve 700,000 miles between critical disengagements to be safer than humans.

The spree of Tesla FSD tweets comes as Tesla is preparing to report its Q1 2025 earnings next week, which should be difficult after the automaker reported its lowest delivery results in three years.

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Environment

Texas just shot its wind + solar boom in the foot on purpose

Published

7 hours ago

April 15, 2025

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Texas just shot its wind + solar boom in the foot on purpose

Texas is No. 1 in the US for wind and solar capacity, but the Texas Senate just passed a bill that aims to kneecap clean energy with an industry-killing review process. Will the Texas House pass it, too?

The Texas Senate today passed SB 819, which creates new restrictions on the development of wind and solar energy under the guise of “protecting” wildlife. The restrictions don’t apply to any other forms of energy.

Texas uses an extraordinary amount of power, and renewables play a big part in supplying that power. The Texas Tribune reported in March that “ERCOT [the Texas grid] predicts that Texas’ energy demand will nearly double by 2030, with power supply projected to fall short of peak demand in a worst-case scenario beginning in summer 2026.” That’s because of extreme weather, population growth, and crypto-mining facilities.

As of February, Texas increased its energy supply by 35% over the last four years, and 92% of that supply came from solar, wind, and battery storage.

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Solar is the largest source of energy generating capacity that has been added to the Texas grid. That’s because it’s cost-effective and it can be deployed quickly. So if new solar projects are kneecapped, power demand will outstrip supply in the Lone Star State.

Daniel Giese, Solar Energy Industries Association (SEIA)’s Texas director of state affairs, stated after the Senate’s vote, “With energy demand rising fast, Texas needs every megawatt it can generate to keep the lights on and our economy strong. We cannot afford to turn away from the pro-energy and pro-business policies that made the Lone Star State the energy capital, but that’s exactly what SB 819 does. We urge the Texas House to reject this bill.”

Less clean energy would also jack up electricity bills for Texans, and rural areas would lose billions in landowner revenue and tax payments. Every time a wind farm or solar farm is installed on rural land, it brings a lot of money to the community that surrounds it. A January report estimated that existing and planned solar, wind, and battery storage projects will contribute $20 billion in local tax revenue and $29.5 billion in landowner payments.

What’s especially baffling about this bill is that it flies in the face of a core Texas value – keeping the government out of private property decisions – yet it does precisely the opposite.

Environment Texas executive director Luke Metzger issued the following response: ‘By making it much more difficult to build wind and solar energy in Texas, this bill threatens to increase pollution, increase blackouts and increase our electric bills.

“Under the guise of helping land and wildlife, SB 819 would create a discriminatory and capricious permitting standard that could grind renewable energy development to a halt.

“We urge the House of Representatives to reject this bill and instead support policies that promote a cleaner, more sustainable energy future for all Texans.”

It will come as no surprise to regular readers that I find this bill ludicrously masochistic. Let me know your thoughts in the comments below, and please keep it civil.

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