Shell (SHEL) Commits to the Development of Iseni Gas Field
Shell plc SHEL has made a final investment decision to develop a facility that will provide 100 million standard cubic feet of gas to the Dangote Fertiliser and Petrochemical Plant in Nigeria. The decision has been taken together with Shell’s joint venture partners — Nigerian National Petroleum Company Limited, TotalEnergies EP and Eni S.p.A.
The Dangote Fertiliser and Petrochemical Plant is owned by Africa’s richest man, Aliko Dangote. Per the terms of the deal, the facility will supply gas from the Iseni field to the Dangote Fertiliser and Petroleum Plant for ten years. According to Shell, the investment decision is a crucial step toward the development of Iseni gas field, which is a part of the Okpokunou Cluster in Oil Mining Lease 35 in the oil-rich Bayelsa state.
The $2.5-billion plant is Africa’s largest urea complex with an annual production of 3 million tons. It meets 65% of Nigeria’s domestic fertilizer demand and also supplies many major markets in the sub-region.
The investment decision comes after Shell finalized a $2.4 billion deal to sell off Shell Petroleum Development Company (SPDC) of Nigeria to Renaissance Oil, a consortium of five companies. Despite the divestment, Shell has affirmed that management of SPDC joint venture facilities, which is responsible for supplying feed gas to Nigeria LNG, will continue to receive its support.
Zacks Rank and Key Picks
Currently, SHEL carries a Zacks Rank #3 (Hold).
Investors might want to look at some better-ranked stocks in the energy sector, such as VAALCO Energy (EGY),Harbour Energy HBRIY and Repsol REPYY. While VAALCO currently sports a Zacks Rank #1 (Strong Buy), Harbour Energy and Repsol hold a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
VAALCO Energy is an independent energy company involved in upstream operation business with a diversified presence in Africa and Canada. With a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
Harbour Energy is a leading independent oil and gas company, primarily involved in upstream operations. The recently announced acquisition of Wintershall Dea asset portfolio is expected to increase HBRIY's estimated production. The company has also done well in reducing its debt in the past year.
Repsol is a global multi-energy company, involved in exploration and production activities as well as refining and marketing petroleum products. The company is also actively involved in transitioning toward cleaner and more sustainable energy solutions. Recently, it announced the expansion of its network of renewable fuel refilling stations in Europe, demonstrating its commitment to a sustainable energy model.
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