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BP Set to Boost Egypt's Gas Projects With $1.5B Investment

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BP plc (BP - Free Report) has announced plans to invest $1.5 billion in Egypt over the next three to four years. This investment aims to bolster gas projects and drilling operations to develop the energy landscape in Egypt.

The announcement follows BP’s recent decision to form a gas-focused joint venture with the Abu Dhabi National Oil Company (“ADNOC”) in Egypt to enhance gas production capabilities in the region.

BP will hold a majority stake of 51% in the joint venture, with ADNOC owning the rest. The partnership underscores BP’s intent to maintain a strong presence in Egypt’s energy sector. Despite the new venture, BP is set to continue holding around 70% of its existing interests in Egypt outside of the ADNOC collaboration.

The investment comes at a critical time for Egypt’s gas industry, which has seen a decline in production due to the natural depletion of its gas fields. Additionally, Egypt has been actively involved in exporting LNG to Europe, especially during non-summer months, to mitigate the impacts of reduced Russian gas supply.

The European Union’s recent tender for gas, which was three times oversubscribed, highlights the growing demand for gas among European countries. This demand provides a backdrop to BP’s investment, indicating a potential for increased gas exports from Egypt to Europe, facilitated by enhanced production capabilities.

Amid this strategic expansion in gas projects, BP faces internal pressures to refocus on its core oil and gas business. Bluebell Capital Partners, a shareholder of BP, voiced concerns over BP’s investment strategy, urging the company to scale back on renewable energy projects and increase profitability.

The push for a clearer strategic direction from BP comes amid shareholder demands for increased transparency about the company’s investment priorities. Critics argue that without a clear articulation of its strategy, BP risks underperforming in the stock market, potentially impacting shareholder value.

Zacks Rank & Stocks to Consider

Currently, BP carries a Zack Rank #4 (Sell).

Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Valaris (VAL - Free Report) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles and modern shallow-water jackups, the company has experience operating in nearly every major offshore basin.

The Zacks Consensus Estimate for VAL’s 2024 EPS is pegged at $4.75. Valaris has witnessed upward earnings estimate revisions for 2024 in the past 60 days. VAL’s 2024 earnings are expected to soar 118.5% year over year.

Murphy USA Inc. (MUSA - Free Report) is a leading independent retailer of motor fuel and convenience merchandise in the United States.

The Zacks Consensus Estimate for MUSA’s 2024 EPS is pegged at $25.58. The company has a Zacks Style Score of A for Growth and B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.

Energy Transfer (ET - Free Report) is a publicly traded limited partnership focused on diverse energy assets in the United States. The company’s core operations involve natural gas midstream services, transportation, storage, crude oil facilities and marketing assets.

The Zacks Consensus Estimate for ET’s 2024 EPS is pegged at $1.44. The company has witnessed upward earnings estimate revisions for 2024 in the past 30 days. ET’s 2024 earnings are expected to rise 12.4% year over year.

See More Zacks Research for These Tickers

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Murphy USA Inc. (MUSA) - free report >>

Energy Transfer LP (ET) - free report >>

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