Robert Rapier, contributing editor to Personal Finance, previously worked as an engineer in the oil industry; here, he speculates on the potential acquisition of a troubled energy giant.

A refinery explosion in the 2005 tragically cost BP (BP) over a billion dollars and tarnished the company’s reputation.

Then in 2010 came Deepwater Horizon, killing 11 workers and spilling an estimated four million barrels of oil into the Gulf of Mexico.

BP’s market value was cut in half over the next few months and still has a long way to go before it can lay its history to rest.

The company still faces costs of $42 billion and potential fines that could push its tab to $55 billion. BP will be tied up in the courts for years and its brand will be linked to the largest marine oil spill in history.

But it’s hard to ignore the value that BP shares present when they trade about 30% less today than they did just before the spill. And that’s not the only measure of the company’s value.

Despite its much-publicized troubles, BP remains one of the world’s six publicly traded supermajor oil companies, also known as Big Oil.

Its operations include not only oil exploration and production but also refineries, retail sites, and petrochemical plants.

BP’s reserves are ridiculously cheap at $8.23 per barrel of oil equivalent (BOE), by far the lowest among the supermajors, which average $14.01/BOE.

That’s why—after more than a decade of telling investors to avoid BP—I recommend buying it instead, even as the company sheds billions of dollars in assets to meet financial obligations related to the spill.

With BP offering so much value, the question is who will recognize it first, a rival or patient investors? A recent Bloomberg story mentioned ExxonMobil (XOM) and Chevron (CVX) as the most likely pursuers.

Royal Dutch Shell (RDS-A) was reportedly a serious contender before its $70 billion acquisition of BG Group.

In my view, Chevron is the best fit. The deal would be huge, but Chevron could pick up a company with solid free cash flow of $10.2 billion, compared to an average of $5.7 billion for the supermajors, despite BP’s legal liabilities.

Chevron also would get reserves at less than half the cost of the ones on its books ($19.80/BOE). Such a merger would create a company roughly the size of ExxonMobil.

The small pool of potential suitors would need to overcome BP’s unsettled legal liabilities and political opposition in the US and UK. As for BP, merging is in its best interest given the severe blow to its brand.

On the other hand, if BP continues as an independent company, investors will need a stomach for risk and patience until BP can put its legal challenges behind it. Buy BP up to $50.