Europe’s largest oil company Royal Dutch Shell plc (RDS.A) announced that its subsidiary has commenced operations of a project in Nigeria to produce and sell oil, providing a new source of energy and economic benefits. Operated by Shell Nigeria Exploration and Production Co. Ltd. (or SNEPCo), a Shell affiliate, the deepwater Bonga North West project involves the recovery of 40,000 oil equivalent barrels per day at its peak.
A part of Shell’s broader Bonga development – which came online in 2005 as the West African nation’s first deepwater initiative in water depths over 1,000 meters – the Bonga North West is an extension of the overall project.
SNEPCo (55% interest) is operator of the Bonga project – off the Nigerian coast – with the other partners being Esso Exploration & Production Nigeria (Deepwater) Ltd. (20%), Total E&P Nigeria Ltd. (12.5%) and Nigerian Agip Exploration Ltd. (12.5%).
Oil produced from the Bonga North West facility will be transported through an undersea conduit to the existing Bonga floating production, storage and offloading (:FPSO) export hub close to the Nigerian shore. The platform, which has been upgraded to tackle the extra liquids flow from the Bonga North West development, will then unload the oil onto tankers for worldwide shipping.
Shell – operating in Nigeria since 1937 – has hailed the project startup as integral to its upstream business, while building on its commitment in the African country.
The Hague-based Royal Dutch Shell, which trumped continental rival BP plc (BP) last week in reporting better-than-expected second quarter earnings, owns one of the largest integrated oil and gas businesses in the world. The group has operations all over the world and is involved in various activities related to oil and natural gas, chemicals, power generation, renewable energy resources and other energy-related businesses.
Shell currently carries a Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. equity market over the next one to three months.
In addition to Shell, there are certain other international integrated energy players like Sasol Ltd. (SSL) and YPF S.A. (YPF) that offer even greater value and are worth buying now. Both the firms sport a Zacks Rank #1 (Strong Buy).