What Went Wrong for BP? Once a Hunter, Oil Giant Is Now Prey

British company has been hit by series of mishaps and missteps over the years, with talk building of a takeover

- Stanley Reed

LONDON — For months, speculation has been building that British energy giant BP could be acquired by a competitor. Its lackluster returns and low share price have made it a tempting takeover target.

An activist shareholder had built up a significant stake in BP and was pushing the company to sell assets to raise cash, and industry analysts began to wonder how long it would take until the entire company was on the auction block.

The situation came to a head on June 26 when Shell, BP's cross-town rival, was forced to issue a denial to media reports about merger talks between the two companies.

BP, which remains one of the world's largest energy companies, is beginning to take steps to enhance its appeal to investors, including cutting costs and bolstering the oil and gas operations that produce the cash to fund the company's large dividend payouts.

It may struggle, though, to shake off the impression that it is a troubled company in danger of losing control of its own destiny.

BP's predicament is a major reversal for a company that was once one of the oil industry's most adventurous and predatory. At the end of the last century, BP's chief executive at the time, Mr John Browne, helped lead a merger wave with deals worth tens of billions of dollars for companies such as Amoco and Arco — two large US oil producers. Mr Browne was also at the forefront of a foray by Western energy companies into Russia.