People in the energy industry are talking a lot about a big deal. The Wall Street Journal said on June 25, 2025, that Shell, the Anglo-Dutch oil giant, is talking about buying its British rival BP. If this merger goes through, it could change the oil industry around the world. The deal could cost more than $84 billion, which is BP’s current market value, and maybe even $100 billion if there is a premium. This would be bigger than the Exxon-Mobil merger in 1998, which was the biggest energy deal in modern history.
A Deal Years in the Making
Shell and BP have been talking about this for a long time, but this time it looks like they are finally getting serious. The Wall Street Journal says that people from both companies are working together, but BP is being careful. The report said, “The talks are moving slowly, and nothing is certain.” But Shell fought back, with a spokesperson telling Bloomberg, “These are just rumors in the market.” There are no talks going on. Even though the merger has been denied, it has sparked both excitement and doubt.
Why BP Is an Appealing Target
BP is a good target because it is weak. Its market value hasn’t changed much; it has only grown 20% in the last five years. Shell’s value has doubled, thanks to smart investments in liquefied natural gas (LNG). In the last year, BP’s stock fell 23% because investors were scared by the company’s quick shift to renewable energy, operational mistakes, and the sudden departure of CEO Bernard Looney during a personal scandal.
Murray Auchincloss, the current CEO, has cut costs, sold off assets like Castrol lubricants and parts of BP’s solar portfolio, and faced pressure from activist fund Elliott, which owns 5% of the company and wants big changes.
A Strategic Power Move
Shell buying BP would be a big step toward closing the gap with big American companies like ExxonMobil and Chevron. Shell is worth a lot, but its market value is only about half that of ExxonMobil’s, even though it makes more money.
Production Comparison
| Company | Market Value | Daily Output (BoE) |
|---|---|---|
| ExxonMobil | Highest | Nearly 5 million |
| Shell + BP (merged) | ~$100 billion+ (projected) | Nearly 5 million |
| Shell (current) | Half of Exxon’s value | — |
| BP (current) | $84 billion | — |
If Shell and BP worked together, they would make nearly 5 million barrels of oil equivalent every day, which is the same amount as ExxonMobil. This would solidify Shell’s position as the leader in LNG, which is a very important energy source for the future.
The merger would also lead to big cost savings through economies of scale, especially in the Middle East and the Gulf of Mexico, where BP has a strong presence. Shell’s experience with British regulators could make it easier for them to get approval, unlike other potential buyers who might have to go through more scrutiny. The two companies could control the global LNG and fuel distribution markets, but merging might be hard because of overlapping operations and cultural differences.
Hurdles and Headwinds
The deal is not set in stone. There are big worries about antitrust because the combined company could have a lot of market share in fuel distribution in many countries. It would also be hard to combine two big companies with different cultures and overlapping operations. Also, BP’s recent problems and investors’ doubts about its push for green energy could make shareholders less likely to accept Shell’s offer, especially if they have to pay a lot more.
Rumors of consolidation are spreading in the energy sector as oil prices fall. ExxonMobil bought Pioneer for $60 billion just two years ago, which started a wave of big deals. A merger between Shell and BP would be much bigger than that deal. It could change the way companies compete and give European oil companies a better chance against their U.S. competitors.
Recent Major Energy Mergers
| Merger | Year | Value | Outcome |
|---|---|---|---|
| Exxon-Mobil | 1998 | $83 billion | Formed global oil giant |
| ExxonMobil-Pioneer | 2023 | $60 billion | Strengthened U.S. shale dominance |
| Shell-BP (Proposed) | 2025 | $84–100 billion | Pending, could lead LNG and oil markets |
What Will Happen Next?
Everyone is watching Shell and BP as rumors fly. Is this going to be the “deal of the century,” or just another chapter in a long story of failed merger talks? The energy industry is holding its breath for now, waiting to see if these two giants can work together and get through the difficult road ahead.