BP (LON:BP) is in the lead to acquire BHP Billiton’s (LON:BLT) US onshore shale assets, Reuters has revealed. The blue-chip oil major has reportedly submitted an offer worth well in excess of $10 billion (£7.6 billion).
BP’s share price has slipped into the red in today’s session, having given up 0.36 percent to 577.00p as of 13:32 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.31 percent higher at 7,641.47 points. BHP Billiton’s share price meanwhile is 1.09 percent better off at 1,682.40p.
BP bids for BHP Billiton assets
People with knowledge of the matter told Reuters on Friday that BP was the front-runner in the auction for BHP’s US onshore shale oil and gas assets, and could reach a deal in coming weeks. The blue-chip oil major as reportedly submitted an offer worth well in excess of $10 billion. The sources indicated to the newswire that other oil major participating in the auction include Royal Dutch Shell (LON:RDSA) and Chevron Corp.
The potential acquisition will come after BP began operating its onshore US business as a separate entity in 2015 to make it more competitive.
BHP said in August that it aimed to sell onshore shale assets in the Eagle Ford, Permian, Haynesville and Fayetteville basins, having come under pressure from activist investor Elliot Management.
Analysts on FTSE 100 oil major
Royal Bank of Canada named BP as a ‘top pick’ today, lifting its price target on the shares from 600p to 675p, while JPMorgan Chase & Co, which sees the company as a ‘buy,’ set a valuation on the stock of 650p. According to MarketBeat, the blue-chip oil major currently has a consensus ‘buy’ rating and an average price target of 596.58p.