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BP Signs Egypt Deal to Drill Five Mediterranean Gas Wells

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Key Takeaways

  • BP signed a preliminary deal with EGAS to drill five Mediterranean gas wells.
  • Drilling is set for next year at depths of 300-1,500 meters via West Nile Delta facilities.
  • Egypt seeks to lure majors back as domestic gas output drops sharply.

BP plc (BP - Free Report) has signed a preliminary agreement with the Egyptian Natural Gas Holding Company (EGAS) to drill five new Mediterranean gas wells, Egypt’s Petroleum Ministry said Monday. The move highlights BP’s long-standing role as a core international partner in Egypt, where aging fields and investment delays have pressured domestic supply.

Drilling is expected to begin next year at depths ranging from 300 to 1,500 meters, with potential output to be channeled through existing West Nile Delta facilities. Egypt, once a net exporter, has become increasingly reliant on imports after gas production fell to 3,545 million cubic meters in May (over 40% below levels seen in early 2021), according to the Joint Organisations Data Initiative.

For BP, the exploration push arrives as the company evaluates how best to direct its $13-$15 billion annual investment budget, balancing new gas ventures in Egypt against global opportunities. The company has recently advanced projects in Azerbaijan, Iraq, Libya, and Abu Dhabi, and is also celebrating a major offshore discovery in Brazil, which it describes as its largest in 25 years.

The announcement follows Egypt’s signing of $340 million in exploration agreements on Aug. 30 with Shell, Eni, and Arcius Energy — a joint venture owned 51% by BP and 49% by ADNOC’s investment arm. The combined set of deals underscores Egypt’s efforts to lure majors back into upstream development to stabilize output and meet surging domestic demand.

BP’s Zacks Rank and Key Picks

BP currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector may look at a couple of better-ranked stocks like Global Partners LP (GLP - Free Report) , Antero Midstream Corporation (AM - Free Report) and Enbridge, Inc. (ENB - Free Report) . While Global Partners and Antero Midstream sport a Zacks Rank #1 (Strong Buy) at present, Enbridge carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Global Partners, a Delaware limited partnership established by affiliates of the Slifka family, operates one of the most extensive terminal networks for refined petroleum products in New England. The company ranks among the region’s largest wholesale distributors of distillates, including home heating oil, diesel, kerosene, gasoline, residual oil, and bunker fuel, catering to wholesalers, retailers, and commercial customers throughout New England.

GLP’s earnings beat estimates in two of the trailing four quarters and missed in the other two, delivering an average surprise of 345.7%. The Zacks Consensus Estimate for 2025 earnings indicates a 23.2% year-over-year increase.

Antero Midstream generates stable cash flow by providing midstream services under long-term contracts with Antero Resources. The company prioritizes debt reduction by effectively utilizing free cash flow after dividends. Antero Midstream’s higher dividend yield compared to its sub-industry peers reflects its commitment to generating shareholder returns.

AM’s earnings beat estimates in two of the trailing four quarters, met once and missed in the other, delivering an average surprise of 1.13%.

Enbridge is a major energy company that owns the longest and most complex oil and gas pipeline system in North America, transporting about 20% of the natural gas used in the United States. The business earns steady fees through long-term take-or-pay contracts, which protect it from price swings or changes in shipping volumes.

ENB’s earnings beat estimates in three of the trailing four quarters and met in the remaining one, delivering an average surprise of 5.61%.

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