In Brazil, Equinor ASA (EQNR - Free Report) has numerous projects of the value chain that include exploration through discoveries and development, production as well as within renewable energy. This makes the country a vital part of the company’s portfolio.
To emphasize the importance of Brazil, the company has established a separate business area — Development and Production Brazil. Its experience in the Norwegian Continental Shelf will help it in developing the acreage in the country.
The company has a daily oil production of more than 90,000 barrels per day from current fields and anticipates investments of more than $15 billion through 2030 in the country. Moreover, Brazil is projected to hold offshore oil and gas basins which offer considerable upside potential and are largely unexplored. Brazil also holds immense potential for renewable energy development.
Equinor’s producing assets in Brazil comprises the Peregrino field. The second phase of that project is expected to become operational in 2020. It also has a share of 25% in the giant Roncador field, which is also producing. The Block BM-C-33, which includes the large pre-salt discoveries of Carcará and Pão de Açúcar as well as the globally competitive exploration acreage, is under evaluation. Additionally, 16 other blocks and Carcará North Block, primarily in the Santos Basin, are being explored. Block BM-S-8 comprising the Carcará discovery and exploration prospect is under appraisal.
Equinor also bought a stake in the Apodi solar project in 2017 that is currently under construction. The project is expected to provide energy to 160,000 households by the end of 2018. Equinor, which has already invested $10 billion in Brazil, plans to expand its footprint in the region through renewable energy and new natural gas value chains. The company plans to invest more than $15 billion through 2030 that will boost production to 300,000-500,000 barrels of oil equivalent per day by 2030, depending on the success of its upstream activities.
Currently, Equinor is drilling the Guanxuma well in the BM-S-8 licence, which has been declared as an oil discovery by Brazilian regulator ANP. Despite existing uncertainties over reservoir properties, more work is required to establish potential of the discovery potential.
In the past year, Equinor’s shares have rallied 42.1% compared with the industry’s 26.6% rise.
Zacks Rank & Stocks to Consider
Equinor currently carries a Zacks Rank #3 (Hold).
A few better-ranked players in the same sector are PetroleoBrasileiro S.A. (PBR - Free Report) , or Petrobras SA, Helix Energy Solutions Group, Inc (HLX - Free Report) and TC Pipelines, LP (TCP - Free Report) . All these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Petrobras is the largest integrated energy firm in Brazil and one of the major players in Latin America. It pulled off an average positive earnings surprise of 10.4% in the last four quarters.
Helix Energy offers specialty services to the offshore energy industry. The company delivered an average positive earnings surprise of 66.7% in the trailing four quarters.
TC Pipelines purchases, owns and actively participates in the management of U.S.-based natural gas pipelines and related assets. The company delivered an average positive earnings surprise of 3.7% in the last four quarters.
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