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Oil & Gas Stock Roundup: Mergers & Partnerships Take Center Stage – April 3,

It was a week when both oil and natural gas prices recorded gains.

The headlines revolved around oilfield service major SLB’s (SLB Free Report) majority stake purchase in Norway’s Aker Carbon Capture and European energy biggie Repsol’s (REPYY Free Report) partnership with agribusiness firm Bunge Global on renewable fuels. Developments associated with VAALCO Energy (EGY Free Report) , Shell (SHEL Free Report) and Enbridge (ENB Free Report) also grabbed attention.

Overall, it was a bullish seven-day period for the sector. West Texas Intermediate (WTI) crude futures moved up around 3.2% to close at $83.17 per barrel, while natural gas prices went higher by 6% to end at $1.76 per million British thermal units (MMBtu).

The crude price action remained positive for the third week running, primarily on the back of relatively bullish fundamentals and tensions in the oil-rich Middle East.

Meanwhile, natural gas settled with its third gain in the last nine weeks on positive inventory numbers and signs of production pullback.

Recap of the Week’s Most Important Stories

1.    SLB, the largest oilfield contractor, has announced its plans to merge its carbon capture segment with Aker Carbon Capture (“ACC”). The partnership aims to expedite the global transition toward net-zero emissions by scaling up carbon capture technologies. Per the terms of the agreement, SLB will acquire an 80% stake in Aker Carbon Capture Holding AS (“ACCH”), which encapsulates ACC’s operations, for NOK 4.12 billion.

The collaboration is not just a financial transaction but a strategic alliance to enhance the carbon capture, utilization and sequestration (“CCUS”) landscape. SLB has committed to make additional payments of up to NOK 1.36 billion over the forthcoming three years, contingent on the joint venture’s performance.

The merger of SLB and ACC is poised to create a powerhouse in the carbon capture domain. The combined enterprise aims to revolutionize the market by leveraging ACC’s established commercial carbon capture product suite, and SLB’s innovative technology and industrialization prowess. (SLB and ACC Join Forces to Accelerate Decarbonization Efforts)

2.    Spanish energy giant Repsol and renowned food and agribusiness company Bunge Global have decided to form a partnership to capitalize on the new opportunities aimed at meeting the rising demand for lower carbon-intensity feedstock used in the production of renewable fuel. By joining forces, both companies will work together to accelerate the expansion of renewable fuel production, keeping in mind the mandates provided by the European Union.

As part of the agreement, Repsol, which carries Zacks Rank #3 (Hold), will be acquiring a 40% stake in three industrial facilities in the Iberian Peninsula. The three facilities are owned by Bunge Iberica, a subsidiary of Bunge. The total consideration for the transaction is $300 million, with up to $40 million in contingent payments. The deal is subject to customary closing conditions.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Per the agreement, the three plants dedicated to the production of oils and biofuel will be operated by Bunge. These plants are located in Bilbao, Barcelona and Cartagena, near Repsol’s industrial complexes in the region. The collaboration allows Repsol to gain access to a wide portfolio of low-carbon intensity feedstock used in the production of renewable fuel. This also provides an immediate way to speed up the process of reducing emissions from transport, including cars, trucks, airplanes and shipping. (Repsol and Bunge to Ramp-Up Renewable Fuel Supply)

3.    VAALCO Energy and its partners have signed the final documents for the Joint Operating Agreement related to the Venus Block-P plan of development (“POD”), after receiving the Government of Equatorial Guinea’s approval. VAALCO is serving as the operator of the block with a 60% interest. The other partners in the project are state-owned GEPetrol and Atlas Petroleum International Ltd.

The Block P Production Sharing Contract outlines a 25-year development and production period from the date when the POD was approved. The POD was approved in 2022. The West Africa-focused oil and gas finder will move to develop, operate and produce from the discovery offshore Equatorial Guinea in the next few years.

VAALCO will move forward with the Front-End Engineering Design study, which, upon completion, will lead to an economic Final Investment Decision (“FID”). The FID will facilitate the development of the Venus POD. (VAALCO Gets the Green Light for Block-P Development)

4 Shell’s renewable energy subsidiary, Shell New Energies US LLC, recently…

Read More: Oil & Gas Stock Roundup: Mergers & Partnerships Take Center Stage – April 3,

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