Oil giant Shell has denied it has been in talks about a potential £80 billion takeover of rival BP whose shares soared on the speculation.

The Wall Street Journal reported that talks had taken place to create an energy giant worth more than £200bn.

In a statement this morning Shell said: “In response to recent media speculation Shell wishes to clarify that it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with, BP with regards to a possible offer.

“Shell confirms it has no intention of making an offer for BP.

“We remain focused on delivering more value with less emissions through performance, discipline and simplification.”

Shell was forced to clarify its position after the WSJ said people familiar with the matter were aware of early-stage talks to create an energy giant that would be of comparative size to US majors such as Chevron and ExxonMobil.

The Shell spokesperson earlier said:”As we have said many times before, we are sharply focused on capturing the value of Shell through continuing to focus on performance, discipline and simplification.”

The New York-listed shares of BP rose by up to 10% before closing 1.8% higher. It is currently valued at £57bn and a typical premium would price it close to £80bn.

Speculation of a merger has circulated in recent months following pressure from activist investor Elliott Management, the American hedge fund, which built a 5% stake in BP, and called for board changes.

BP CEO Murray Auchincloss scaled back the company’s commitment to green energy as investors sought better returns.

His Shell counterpart Wael Sawan has significantly scaled back its green power business and is making steep cost-cuts.

Market reaction

Dan Coatsworth, investment analyst at AJ Bell, said: “Shell buying BP is second only to a bid for ITV as the perennial takeover talk that won’t go away. The fact rumours keep circulating might suggest there is some truth in the matter, be it Shell or someone else looking to buy the UK oil and gas producer.

“Shell says it hasn’t been actively considering an offer, but that doesn’t mean it won’t do so in the future.

“If Shell doesn’t move on BP, there’s a good chance someone else will. In either situation, the UK government is going to have a lot to think about.

“Shell buying BP would keep the energy giant in British control but could result in big job losses which is a bad look for a government trying to revive economic growth. An overseas entity buying BP might cause a political stir around one of the country’s biggest energy players falling into foreign hands.

“Saudi Aramco, ExxonMobil, Chevron, TotalEnergies or a private equity consortium could feasibly be interested in all or some of BP, but foreign trade players in particular could come against significant opposition from the UK government and regulators.”