NEW YORK (TheStreet) -- As mergers and acquisitions go, the energy industry has seen some of the biggest, from the $80 billion merger between Exxon and Mobil in 1998 to the $15.1 billion takeover of Canada's Nexen by China's CNOOC (CEO) - Get CNOOC Limited Sponsored ADR Report in 2012. With the recent double-digit drop in crude prices, another acquisition could be on the horizon, this time, of European oil giant BP (BP) - Get BP p.l.c. Sponsored ADR Report .

BP is currently under investigation due to its role in the worst offshore oil disaster in the U.S. history, the 2010 Gulf of Mexico oil spill from BP's deepwater Macondo well. The company could be slapped with fines of around $18 billion, in addition to the $28 billion it has already spent on damages and clean up costs. This creates a significant uncertainty about BP's future which no other company would want to assume, said Howard Weil's analyst Blake Fernandez in an email to TheStreet.

In a Nov. 7 report, however, Oppenheimer's senior energy analyst Fadel Gheit said that a comprehensive oil spill settlement would remove the financial uncertainty, paving way for an acquisition. BP's shares have fallen by nearly 32% since the oil spill was reported more than four years ago and are down 16% for the year to date, now hovering around $41 each.

BP has been at the center of takeover speculation since the Gulf of Mexico disaster. This time, however, the futures of WTI and Brent crude have fallen by more than 20% over the last three months to multi-year lows. A persistent weakness in oil prices could lead towards an uptake in consolidation activity in the energy industry as oil producers join forces to achieve cost savings. This could make BP a "potential takeover target", Gheit wrote.

Gheit said that BP is currently attractively valued, with one of the lowest price-to-earnings and price-to-cash-flow ratios as compared to its peers, based on 2015 estimates.

There aren't many companies that could undertake an acquisition as big as BP. Two years ago, China's offshore oil giant made the aforementioned acquisition of Nexen, the biggest foreign takeover in the country's history. The size of that deal was about 10 times smaller than BP's current enterprise value of more than $148 billion, after considering its debt and cash reserves.

In an email interview with TheStreet, Gheit agreed that given BP's size, it is highly unlikely that the three Chinese oil majors, CNOOC, PetroChina (PTR) - Get PetroChina Company Limited Sponsored ADR Report and China Petroleum & Chemical or Sinopec (SNP) - Get China Petroleum & Chemical Corporation Sponsored ADR Class H Report , would ever consider buying BP, even if they work together. 

Instead, Gheit said that western oil behemoths Exxon Mobil (XOM) - Get Exxon Mobil Corporation Report , Chevron (CVX) - Get Chevron Corporation Report and Shell (RDS.A) are the only companies that are big enough to undertake such a transaction. Such a merger could give birth to "the world's largest oil producer" and generate annual cost savings of more than $10 billion.

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Of these three companies, Shell is sitting on the largest cash reserves of more than $19 billion, as opposed to Chevron with $14.2 billion and Exxon Mobil with less than $5 billion. Exxon Mobil, however, generates the largest amount of cash flow from operations of nearly $48 billion over 12 months, higher than Shell and Chevron that netted $41.5 billion and $35 billion in the same period.

Shell and Chevron, however, would be the bigger beneficiaries of a potential BP acquisition as it will allow either company to double the size of its hydrocarbon reserves.

According to last year's estimates, BP had nearly 18 billion barrels of oil equivalent reserves, significantly greater than Shell and Chevron with 13.9 billion and 11.2 billion barrels of oil equivalent reserves respectively. Exxon Mobil, on the other hand, has more than 25 billion barrels of oil equivalents reserves.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

TheStreet Ratings team rates BP PLC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate BP PLC (BP) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."

You can view the full analysis from the report here: BP Ratings Report