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BP Plc (BP) Projects Significant Production Growth by 2020

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Energy giant BP Plc (BP - Free Report) recently announced that it anticipates production to reach 4 million barrels of oil equivalent per day (BOE/D) by the end of 2020. The company had produced 3 million BOE/D in 2016.  

The increased output will be supported by seven key developments that will start production in 2017. Out of the seven developments, two projects are already online, while the other two are yet to become operational. Nine projects, which are expected to come online next year, will also support BP’s expected higher production.

BP added that with the present level of investment, production will spring back to levels before the 2010 Macondo oil spill incident. Investors should know that the energy major had to divest one third of its assets to make up for the losses associated with the oil spill.   

Apart from focusing on oil and natural gas production, BP is now concentrating on the renewable energy sector. With the shift toward low carbon energy, BP has been eyeing renewables to boost its growth. In fact, BP has already inked an accord with General Electric Company (GE - Free Report) to support its wind energy business.   

Headquartered in London, BP is an integrated energy company. The company’s stock underperformed the Zacks categorized Oil & Gas-International Integrated industry year to date. During the aforesaid period, the stock lost almost 3.2% as against 2.7% decrease for the broader industry.

Moreover, BP’s reliance on Russia and offshore activity worldwide increases uncertainty amid sanctions and volatile oil prices. Given that Russia is the second-largest contributor to BP’s production and earnings after the U.S., Russian sanctions would adversely affect company’s operations as well as dividend income from its stake in Rosneft.

As a result, the company carries a Zacks Rank #5 (Strong Sell).

Some better-ranked players in the energy sector includeCanadian Natural Resources Limited (CNQ - Free Report) and McDermott International Inc. . Canadian Natural sports a Zacks Rank #1 (Strong Buy), while McDermott carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.       

We expect year-over-year earnings growth for Canadian Natural of 720% for the current year. 

McDermott beat the Zacks Consensus Estimate in each of the trailing four quarters with an average positive surprise of 387.50%.   

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