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TotalEnergies (TTE) Wins Licenses in Suriname, Boosts Operation

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TotalEnergies (TTE - Free Report) and its partner Qatar Petroleum have been awarded licenses to explore two new Shallow Water blocks, namely Block 6 and Block 8, in the Suriname SHO Bid Round 2020/2021. TotalEnergies will operate these blocks, situated in shallow water with depths between 30 meters and 50 meters, and adjacent to the company operated Block 58 in the region.

TotalEnergies will operate the blocks with a 40% working interest, alongside Qatar Petroleum (20%) and the national company Staatsolie (40%). The company has expertise and knowledge to operate offshore oil and gas reserves. These licenses allow the consortium to explore the offshore waters of Suriname, which is emerging as a world-class basin due to its rich reserves of fossil fuels.

Increasing Usage of Fossil Fuel

The U.S. Energy Information Administration forecasts that global consumption of petroleum and liquid fuels will average 97.7 million barrels per day (b/d) throughout 2021, indicating a 5.4 million b/d increase from 2020. Also, global consumption of petroleum and liquid fuels will likely increase 3.6 million b/d in 2022 to average 101.3 million b/d. The assumption takes into consideration continuing economic growth and increasing mobility as a result of the easing of COVID-19 pandemic restrictions.

No doubt, TotalEnergies — with widespread operations across the globe — will benefit from the improvement in demand for petroleum products globally. A significant portion of its revenues comes from the oil and gas business.

Focus on Clean Energy

TotalEnergies is currently advocating for the reduction of emission, and focusing on generating energy from alternate and clean sources. The acquisition of SunPower Corporation has enabled the company to expand solar operations since 2011. It now plans to scale up renewable generation capacity to 25 GW by 2025. TOTAL also targets to generate 40% revenues in 2050 from low-carbon electricity sales.

Increasing usage of clean renewable energy creates ample opportunity for growth. Given the possibility of increasing the usage of renewable energy, oil and gas companies like BP Plc (BP - Free Report) , Chevron Corporation (CVX - Free Report) and Royal Dutch Shell Plc (RDS.A - Free Report) , among others, are also investing heavily in the renewable energy space.

Price Performance

In the past month, TotalEnergies’ shares have outperformed the industry.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank

TotalEnergies currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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