BP to Invest $10.7B for Clean Energy Initiatives in Germany
BP plc BP is allocating a budget of up to $10.7 billion for investing in low-carbon fuels, renewables and electric vehicle (EV) charging infrastructure in Germany by the end of this decade, per a Reuters report.
The latest move is in line with the company’s strategy to rival the local energy firms.
BP recognizes Germany as one of the key countries in its strategy to significantly expand the use of low-carbon fuels and electricity, while moving away from fossil fuels.
As part of its investment efforts in Germany, BP intends to expand its local network of high-speed EV charging stations, decarbonize its refineries and proceed with wind power initiatives. The company is also exploring the possibility to set up a regional center for importing low-carbon hydrogen.
Increasing global awareness of climate change has put significant pressure on countries, including Europe’s largest economy, to accelerate their transition to cleaner energy sources. Firms at the forefront of the energy transition could secure a competitive edge in an upcoming global economy characterized by low-carbon emissions.
Hence, BP intends to allocate a budget of $55-$65 billion toward its emerging transition ventures from 2023 to 2030, eventually matching its financial commitment to oil and gas. The magnitude of this investment is likely to pose a significant challenge for established power utilities, which are finding it difficult to rival the financial strength of oil companies.
BP’s presence in Germany spans more than a century. BP operates two refineries in Germany’s Lingen and Gelsenkirchen. It also oversees Aral, which happens to be the largest petrol station network in Germany. BP provides more than 1,700 fast EV loading spots in Germany through its Aral brand.
BP plans to achieve up to 20,000 charging points by 2030, capitalizing on the increasing embrace of electric vehicles, with various automakers like Volkswagen and BMW introducing the latest models.
Price Performance
Shares of BP have underperformed the industry in the past six months. The stock has gained 6.7% compared with the industry’s 12.3% growth.
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Zacks Rank & Stocks to Consider
BP currently carries a Zack Rank #5 (Strong Sell).
Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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USA Compression Partners has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for USAC’s 2023 and 2024 earnings per share is pegged at 30 cents and 58 cents, respectively.
Enerplus Corporation ERF is an independent oil and gas production company with resources across Western Canada and the United States.
Enerplus has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for ERF’s 2023 and 2024 earnings per share is pegged at $2.26 and $2.66, respectively.
Global Partners GLP is a leading operator of gasoline stations and convenience stores. Over the past 60 days, GLP has witnessed upward earnings estimate revisions for 2023 and 2024, respectively.
The Zacks Consensus Estimate for Global Partners’ 2023 and 2024 earnings per share is pegged at $3.46 and $3.69, respectively. GLP currently has a Zacks Style Score of A for Value and Growth.
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