Takeover chatter dominated trading rooms as speculation swirled that BP could be a target this year amid chaos at the oil giant.
Rumours that rival energy major Shell could be a candidate for a mega-merger with BP went into overdrive in the City.
US firm Chevron, which bought competitor Hess for £42bn last year, was also thrown into the ring as a credible option to buy the London-listed company.
BP has a market capitalisation of more than £80bn, which would probably make any offer one of the biggest in the world in 2024.
The firm was thrown into disarray last year after the shock exit of disgraced ex-chief executive Bernard Looney over former relationships with colleagues. It denied Looney £32m in pay and bonuses over ‘serious misconduct’ but the saga is far from over.
BP’s board is yet to appoint a permanent boss nearly four months on, with interim chief executive Murray Auchincloss trying to steady the ship. Investors hope that reports of a replacement early this year are correct.
Both BP and Shell’s share prices were buoyed as oil prices rose around 1pc over concerns about Middle Eastern oil supply.
It followed disruption at a field in Libya and heightened tension around the Israel-Hamas war.
Brent crude rose 70 cents, or 0.9pc, to $78.95 a barrel by around midday. BP shares rose 0.3pc, or 1.2p, to 473.45p while Shell was up 0.1pc, or 1.5p, to 2594.5p.
AJ Bell investment director Russ Mould said: ‘The UK does not own a golden share in BP, unlike say BAE Systems or Rolls-Royce, so from that perspective an approach is not impossible. We have also seen large mergers and acquisitions deals in the US in the energy sector, while BP shares have lagged those of oil major peers for some time, not least because investors did not wholeheartedly buy in to Looney’s strategy.
‘Absence of a permanent chief executive, a less indebted balance sheet and a lowly valuation may also catch the eye, while the prospect of interest rate cuts and cheaper debt could prompt some into reviewing the situation.’
