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BP-Kosmos Energy to Explore Blocks in Sao Tome and Principe

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Per the national oil agency, BP plc (BP - Free Report) and partner Kosmos Energy Ltd (KOS - Free Report) have received exploration rights to two offshore oil blocks — 10 and 13 — in Sao Tome and Principe’s exclusive economic zone (“EEZ”).

The companies won the twin blocks in a restricted tender, beating a second consortium of Portugal’s Galp Energia and Total SA .

Encircled by oil-rich neighbors Nigeria, Cameroon, Equatorial Guinea and Angola, Sao Tome and Principe, is a tiny island nation in Africa’s Gulf of Guinea.

EEZ is spread over 129,000 square kilometers and is divided into 19 blocks. No significant discovery has been made in the region after several years of exploration. However, the industry is currently highly attracted to this region where several companies are exploring oil.

In 2015 and 2016, Kosmos Energy, active in other parts of West and Central Africa, won licenses to blocks 5, 6, 11 and 12. Based on seismic results, the company is anticipated to commence drilling in 2019.

BP is among the leading integrated energy players in the world. The company has a portfolio of major upstream projects like Clair Ridge, Juniper and Mad Dog Phase 2 developments that are expected to fetch significant cash flow. The company expects the projects to add 800 Mboe/d to net production capacity by 2020, once they are online. Notably, 90% of these upstream developments are either under construction or are completed.

Price Performance

BP’s shares have gained 25.5% compared with the industry’s rally of 24.1% in the last six months.



 

Zacks Rank & Key Pick

BP has a Zacks Rank #3 (Hold). A better-ranked player in the energy sector is Statoil ASA , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Statoil, based in Norway, is a major international integrated oil and gas company. The company reported average negative earnings surprise of 8.44% in the last four quarters.

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