BP plc May Spend $10 Billion to Produce Natural Gas in Egypt - Analyst Blog

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British energy giant BP plc ( BP ) is planning to spend roughly $10.0 billion in Egypt in the coming five years for producing natural gas, as per media reports.

The reports also indicate that the company is planning to restart a natural gas development located in the north of Alexandria. BP plc stopped the Alexandria gas project temporarily in 2011 owing to certain instability issues. The project - which is expected to serve almost 25.0% of the local gas demand - will likely commence production by 2017.

U.K.-based BP plc is one of the world's major energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemical products.

We find the company's strategy of offloading its non-core upstream properties and its focus on upstream activity as favorable. BP plc remains confident about the 15 major project startups by 2014 and the planned commissioning of the Whiting refinery upgrade.

However, the U.S. Environmental Protection Agency (EPA) has barred BP plc from making fresh contracts with the federal government as the company was unable to demonstrate proper business integrity with regard to the 2010 Deepwater Horizon oil spill. The continuation of such suspension for a longer period may affect the company's operations and earnings.

BP plc currently retains a Zacks Rank #3 (Hold) implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the energy sector like ConocoPhillips ( COP ), Clayton Williams Energy Inc. ( CWEI ) and Kosmos Energy Ltd. ( KOS ). All these stocks sport a Zacks Rank #1 (Strong Buy).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BP , COP , C , CWEI , KOS

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