The Wall Street Journal reported that Shell has opened early-stage discussions about buying London-based rival BP in a transaction that could value the target at about $80 billion. People familiar with the matter described the talks as active but preliminary, noting a deal would be the largest oil-industry merger since Exxon’s $83 billion tie-up with Mobil a quarter-century ago. News of the approach sent BP’s shares up as much as 8 percent in London trading, while Shell slipped roughly 3 percent. BP’s equity is currently worth close to $80 billion, compared with Shell’s market capitalisation of a little more than $200 billion. A combined group would produce more than five million barrels of oil equivalent a day and command a significant share of the global liquefied natural gas trade. Within hours of the Journal’s report, a Shell spokesperson said that “no talks are taking place” and characterised the article as further market speculation, adding that the company remains focused on performance, discipline and simplification. Separate reporting by CNBC, citing its own sources, suggested that if BP is ultimately sold, the company may be broken up, with Shell and other buyers acquiring separate business units rather than the entire group. Whether or not negotiations resume, the episode underscores renewed consolidation pressure among the Western oil ‘supermajors’ following Exxon Mobil’s $60 billion purchase of Pioneer Natural Resources and Chevron’s pending $53 billion offer for Hess. It also highlights investor agitation at BP—activist Elliott Investment Management now holds about 5 percent of the stock—as the company works to improve returns after years of under-performance.