BHP Billiton PLC (LON:BHP) shares jumped on Monday after BP PLC (LON:BP) emerged as a leading contender to buy the mining group’s US onshore shale assets.
BP is the front-runner in the auction for the assets after submitting an offer worth over US$10bn, Reuters reported, citing sources.
The companies could reach a deal in coming weeks, though it is possible negotiations could end unsuccessfully, the sources said.
For BP, a deal would allow the group to take advantage of the recent recovery in energy prices and to expand its US onshore business, which began operating in 2015.
Activist investor pressures BHP to sell assets
BHP announced in August that it would sell onshore shale assets in the Eagle Ford, Permian, Haynesville and Fayetteville basins after receiving pressure from activist hedge fund Elliott Management Corp.
In requesting the mining company to sell the assets, Elliott had described BHP’s venture into US shale as a financial disaster.
BHP was forced to write US$13bn off the value of its US shale business following a slump in the price of oil.
READ: BHP Billiton up as it commits to exit its underperforming US shale business and posts jump in annual profit
The acreage up for auction includes holdings BHP acquired through its US$12bn takeover of Petrohawk Energy in 2011 at the height of the fracking boom.
BHP and BP have not responded to requests for comment on the report.
In midday trading on Monday, shares in BHP rose 1.2% to 1,684p while BP dipped 0.2% to 577p.
BP resolves card payments problem
Meanwhile, BP said that its fuel stations across the UK were now able to accept card payments after a glitch that lasted more than three hours on Sunday night.
BP has launched an investigation to determine what caused the problem that left customers at 1,280 sites unable to pay with their cards.
"We will continue to monitor the situation overnight to ensure the smooth running of our operations,” the company said.