Exxon Mobil Corp (NYSE: XOM) and Royal Dutch Shell Plc (NYSE:RDS.A) may consider take-over bids for BP Plc (LON: BP) after the British oil company lost more than half of its market value as a result of the Gulf of Mexico oil spill, said JPMorgan’s Cazenove Ltd.
Exxon Mobil has a stronger balance sheet than Shell and has a proven ability to successfully integrate such a large business, wrote Fred Lucas, a London-based analyst at JP Morgan. Exxon Mobile could make an offer with cash and shares with Shares of BP valued at 322 pence at the end of trading on Friday.
BP’s market value has dropped by more than $100 billion since the April 20th explosion onboard the Deepwater Horizon drilling rig which killed 11 crew members resulting in an unprecedented oil spill in the Gulf of Mexico. BP has set aside $20 billion to pay claims related to the spill and said last week that the total cost of the spill had already reached $2.65 billion.
JPMorgan Chase & Co. (NYSE: JPM) said that any attempt to purchase BP would have to be backed with “ruthless integration.” Lucas said that BP has a number of high quality assets including deepwater positions and up-stream operations.