BP is reportedly the frontrunner in the bid to buy BHP Billiton’s US-based onshore shale oil and gas assets following submission of an offer worth more than $10bn.
This is considered to be a major move by the company and comes as the prices are rebounding.
Following a significant focus on natural gas assets, BP will now be able to rebalance its business with oil production.
Citing sources, Reuters reported that a deal is likely to be reached in the coming weeks.
Sources, however, also added that negotiations may also end unsuccessfully.
In August, BHP announced its plans to divest onshore shale assets in the Eagle Ford, Permian, Haynesville and Fayetteville basins.
It purchased these assets when the oil prices were at its peak. It has reportedly come under pressure from Elliott Management to explore divestment of these assets.
Among the acreage to be sold also comprises the holding that BHP bought in its $12bn takeover of Petrohawk Energy in 2011.
The price of natural gas has dropped from $4.50 in 2011 to $1.60 last year.
Three years ago, BP started running its onshore assets in the US as a separate entity, and the Haynesville and Bossier shale plays near the Texas-Louisiana border have since been added to the onshore assets.
BP’s expansion in the US shale segment has been behind many of its competitors. The company’s energy was focused on the aftermath of the Deepwater Horizon oil-spill disaster in the Gulf of Mexico, while its competitors were expanding their base on onshore fields.
The oil spill disaster compelled BP to pay billions of dollars in damages since 2010.
If BP acquires BHP’s acreage, it will add the oil-rich wells in the Permian and Eagle Ford basins of Texas to its portfolio.
Among the other majors that took part in the bidding for the assets included Chevron and Royal Dutch Shell, sources told the news agency.
