In a surprising turn of events in the oil industry, Abu Dhabi National Oil Company (ADNOC) was reported to have considered the acquisition of British energy giant bp. According to a Reuters report on Thursday, sources close to the matter revealed that initial discussions were held but did not progress significantly due to strategic and political considerations.

ADNOC, a powerhouse in the UAE's oil and gas sector, evaluated the compatibility of incorporating bp, valued at $110.3 billion, into its future plans. Although talks included consultations with investment banks and direct communications with bp, the discussions did not advance beyond preliminary stages.

This news emerges as major International Oil Companies (IOCs) in the U.S., such as ExxonMobil and Chevron, have actively pursued acquisitions, with ExxonMobil taking over Pioneer Natural Resources and Chevron acquiring Hess Corporation. Such moves underscore a growing trend of consolidation within the U.S. oil sector, contrasting with the quieter M&A scene among European oil majors.

bp has been viewed by market analysts as a potential acquisition target, especially as shareholder pressure mounts for the company to refocus on its core oil and gas operations. In the first quarter of 2023, bp announced intentions to scale back its energy transition strategy, aligning more closely with the approaches of other IOCs like Shell and Chevron.

Despite not proceeding with the acquisition of bp, ADNOC has not shied away from its ambitions, announcing plans to ramp up oil and gas production. This strategy positions ADNOC as a significant player likely to pursue acquisitions of smaller global energy companies in its quest to expand its influence on the global stage.

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