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Shares in oil major BP rise 1.6 percent, adding 5.1 points to theFTSE 100 and helping drag it into positive territory, with some tradersciting resurfaced talk that U.S. energy giant Exxon Mobil could be aboutto bid for the UK-listed firm.
Others, however, cite the impact of news late Thursday that Azerbaijan,where BP is a partner in the Shah Deniz II project, had signed contracts tosupply gas to Europe, with the bulk of it going to Italy.
BP declined to comment on the market talk.
Volume in BP is 55 percent of its 90-day daily average volume, compared with30 percent for the FTSE 100, by 0950 GMT, Thomson Reuters data shows.
Exxon's Frankfurt-listed shares are up 0.5 percent.
Bid talk has consistently circled BP after a huge oil spill in the Gulf ofMexico in 2010 resulted in BP's share price being savaged. It still tradesaround 30 percent below its level prior to the spill.
The chairman of Royal Dutch Shell, Peter Voser, has said in the past thathis company was looking at its options with regard to bidding for the company asthe shares plummeted.
"BP appears to be possibly the most undervalued stock out of all the majorglobal integrated oil companies (on around 8 time 12-month forwardprice-to-earnings)," Ronnie Chopra, a strategist at TradeNext, says.
"This is a world-class firm and it has made substantial progress in dealingwith claims since the 2010 oil spill in the Gulf of Mexico but with thelitigation process in the US extremely long winded this has cast a cloud overthe share price," he says.
Traders also say that while acknowledging the talk was driving the shareshigher a bid was unlikely to be forthcoming soon given BP was still mired inlitigation relating to the oil spill.
Reuters messaging rm://david.brett.thomsonreuters.com@reuters.net
Reuters messaging rm://andrew.callus.thomsonreuters.com@reuters.net
