UAE’s ADNOC said to have recently considered BP takeover

The United Arab Emirates' state-owned oil company recently considered buying BP but the deliberations did not progress beyond preliminary discussions, according to a report.

Reuters cited people familiar with the matter as saying that Abu Dhabi National Oil Company (ADNOC) ultimately decided BP would not be the right fit for its strategy. Political considerations also weighed on the potential move, one of the people said.

The £88bn company has underperformed its competitors for years, which investors and analysts say has made the British firm a potential takeover target. US oil giants are in the midst of the industry's biggest consolidation for decades, but European oil majors have to date not been involved.

It was understood that ADNOC and BP spoke directly in recent months and ADNOC also sought advice from investment banks on a potential deal.

Sources told Reuters the Emirati giant considered all options when looking at BP, including buying a big stake.

Large companies typically evaluate the market value and strategic worth of rivals for potential acquisitions. BP was one of many companies ADNOC has looked at, a Reuters source said.

"It didn't go far," the person said of the considerations over buying BP.

It was also understood that ADNOC has looked at other international companies to give it access to a bigger gas and liquefied natural gas (LNG) portfolio.

ADNOC declined to comment to Reuters, while a BP spokesman and a spokesman for Britain's business ministry also declined to comment.