Speculation Rises Over BP-Shell Merger

Rumours that oil giants BP and Royal Dutch Shell are about to merge are gathering strength, with two daily UK newspapers speculating on the deal.

The Times and the Daily Mail reported on merger talks, which would potentially create the world's largest company – with a market value of £250bn.

The Daily Mail says: "red hot rumours suggest that top corporate financiers, financial advisers and executives of BP and Royal Dutch Shell are currently involved in round-the-clock discussions centered on finalising terms for a 'friendly' mergers which many industry analysts believe would make a great deal of sense."

Meanwhile, The Times reports: "the City is awash with talk that Britain's two largest oil companies have engaged financial advisors to discuss terms for a so-called friendly merger that could result in £2.5bn of cost savings for the enlarged group."

Merger plans were also rumoured last year, when Lord Browne, former chief executive of BP was said to have approached Shell about a deal.

The rumours come as global oil prices reach a ten-month high, with Brent crude hitting $73.12 a barrel before dropping back to $72.90 a barrel yesterday.