Shell could buy BP for just £5 a share

wotsthat

Thrugelmir wrote: »

Why did you think that now is a good time to buy? Are you expecting oil price to rise soon?

I had a monthly SIPP contribution looking for a home. BP looked like it could do with a top up and the shares are cheaper too. That's it. We're talking about a sum of money less than half a percent of my total pension so I'm hardly betting the farm.

I haven't got a clue where the oil price is going to go in the near term. Probably up or down.

purch

Well if RDS do launch a takeover bid, then the share price will only go one way.

IveSeenTheLight

Generali wrote: »

Getting it past regulators would be impossible or as near as dammit.

Why do you think this would be impossible?
I'm interested to know what you think the hurdles would be.

Many operators sell off assets to other operators.
Others are looking to leave certain sectors.
Why couldn't a buyout occur?

IveSeenTheLight

wotsthat wrote: »

I haven't got a clue where the oil price is going to go in the near term. Probably up or down.

The industry is predicting a very cool 2015, potentially into 2016.
Into 2017 / 2018, they expect it to be quite manic

purch

IveSeenTheLight wrote: »

I'm interested to know what you think the hurdles would be.

Maybe because both are part of the Big 6 World Energy Company's, along with ExxonMobil, Chevron, Total and ConocoPhillips.

I'm sure any such merger/takeover would come under the scrutiny of the Competition Act 1998

Generali

IveSeenTheLight wrote: »

Why do you think this would be impossible?
I'm interested to know what you think the hurdles would be.

Many operators sell off assets to other operators.
Others are looking to leave certain sectors.
Why couldn't a buyout occur?

For a start, there are about 8,500 petrol stations in the UK (Source: Wiki) with 1,100 owned by BP and 900 by Shell the concentration of market power at the petrol pump in the UK alone would be enough for regulators to look very hard at any proposed deal.

Of course I can't know whether or not a merger/takeover would be scuppered but I think it would be highly unlikely to go ahead.

Thrugelmir

IveSeenTheLight wrote: »

Many operators sell off assets to other operators.

If the low price continues. Then North Sea assets will be turned off. There'll be no market to buy them. Both the USA and Mexico have untapped off shore reserves that will have lower production cost than the North Sea.

BP is announcing further job losses on Wednesday.

Generali

Thrugelmir wrote: »

If the low price continues. Then North Sea assets will be turned off. There'll be no market to buy them. Both the USA and Mexico have untapped off shore reserves that will have lower production cost than the North Sea.

BP is announcing further job losses on Wednesday.

Do they actually stop production? I know that for mines that approach is uneconomic.

Mines stay open as long as operating costs are being covered. I would expect the samething from oil wells. There will be a cost to turning off production and obviously no revenues.

IronWolf

North American oil is very young, that means high decline rates. There is no real reason for the big oilies to cut back production because when oil gets to a price where it is uneconomical to drill new wells, NA oil production will fall pretty rapidly and the supply glut will be over.

wotsthat

Thrugelmir wrote: »

If the low price continues. Then North Sea assets will be turned off. There'll be no market to buy them. Both the USA and Mexico have untapped off shore reserves that will have lower production cost than the North Sea.

Is it different this time or just numbers going up and down?

Doesn't seem yesterday when many were complaining that oil companies could just put up prices whenever they fancied.