Shell May Still Need M&A After Ruling Out Buying BP
The oil giant has denied it’s pursuing an acquisition of its UK rival, but that doesn’t preclude other deals.
Wael Sawan, chief executive officer of Shell, is focusing on boosting his share price, which may come in handy if he decides M&A is necessary.
Photographer: F. Carter Smith/BloombergBritish oil and gas giant Shell Plc has quashed a rumor: It’s not buying BP Plc. But last week’s forceful denial doesn’t address why the M&A chatter gained so much traction, which has less to do with the parlous state of BP than with Shell itself. Looking to 2030 and beyond, it does feel like Shell needs to buy something or someone.
Since his January 2023 appointment as chief executive officer, Wael Sawan has done a decent job steadying Shell. Spending and debt are down, unprofitable green projects are gone and cash generation is improving. That’s all well and good; but viewing such business basics as evidence of success just shows how the wheels had fallen off before his arrival. What’s still missing is any sense of a vision to sustain oil and gas production beyond the next five years.