Leading integrated energy firm
Royal Dutch Shell plc
) is closing in on a deal with the Iraqi government to set up a
major petrochemical facility in the southern part of the country.
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The $11 billion ethane-cracking facility - entitled Nebras -
would produce ethylene, which is used in making plastic.
Both the parties are expected to sign a Heads of Agreement within
a few weeks. Per Shell management, the company had signed a
memorandum of understanding (MoU) last Apr for a technical and
economical feasibility study to realize the full potential of the
Shell already has a strong foothold in Iraq and is helping the
government to exploit its resources. It is developing the giant
Majnoon oil field, near Basra that came online last month and is
currently producing around 200,000 barrels per day. Also, last
year, the company had inked a $17.2 billion deal to collect gas
from Iraq's southern oil field, helping the country to utilize
the produce for its domestic energy requirements.
Shell's worldwide operations involve various activities related
to oil and natural gas, chemicals, power generation, renewable
energy resources, and other energy related businesses.
In terms of assets, Royal Dutch Shell owns a strong and
diversified portfolio of global energy businesses that offer
attractive growth opportunities.
However, Royal Dutch Shell's relatively heavy downstream exposure
leaves it less diversified than its integrated peers. As such,
the group's results remain greatly exposed to refining/marketing
Royal Dutch Shell 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 1 to 3 months.
However, there are other stocks in the energy sector that are
expected to outperform in the near term. These include the Zacks
Rank #1 (Strong Buy) stocks of
SM Energy Company
Clayton Williams Energy, Inc.
Emerge Energy Services LP Commo