Energy consolidation talk raises prices
Published on : 18/05/2007
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Talk of consolidation in the energy industry caused share prices to rise sharply yesterday (Thursday) - with two of Britain's biggest companies seeing their value shoot up.
British Petroleum (BP) was linked with Shell in a tie-up that would be worth more than £200 billion - and frenzied speculation saw Shell prices soar to 1859p, a rise of 66p. BP shares were up to 570dp in the late afternoon - rising 13dp from the early part of the day.
These shares were already on the rise as a result of concerns that production difficulties at refineries might lead to a shortage of supply in the US, where the peak driving season is soon to begin.
Rumours also persisted that an unnamed company was considering making a bid for oil and gas exploration giant Cairn energy - and the company's shares rose by 62p to finish at 1735p as a result.
Shell has spent the best part of a decade in the shadow of BP - despite the fact that it has produced nearly as much as crude oil, and refined far more, than its rival. This is because of BP's image as an exciting, risk-hungry trader, which dates back to the 80s.
It is, however, beginning to lose this reputation to an extent, analysts say.
