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BP and EOG Resources to Develop Major Trinidad Gas Field by 2026

BP plc (BP), the UK-headquartered energy giant, and U.S. shale producer EOG Resources, Inc. EOG are reportedly in talks to develop a significant natural gas field off the coast of Trinidad and Tobago.  The British oil major confirmed the discussions, highlighting the field’s potential to enhance its natural gas portfolio, per a Reuters report.

The field holds nearly 1 trillion cubic feet (tcf) of natural gas. However, plans are in place to integrate it with another BP discovery in the area, bringing the total potential development to 1.5 tcf. According to the report, the initial production of gas, known as "first gas," is anticipated by late 2026. This output is expected to supply Trinidad's premier liquefied natural gas (LNG) facility, Atlantic LNG, wherein BP and Shell hold a 45% equity stake each.

Trinidad and Tobago stands out as Latin America's largest LNG exporter and ranks as the world's second-largest exporter of methanol and ammonia. Atlantic LNG's output constitutes a significant portion of BP's LNG portfolio. However, production at the facility has faced challenges due to declining gas outputs from older fields.

A spokesperson for BP's Trinidad and Tobago division confirmed ongoing "active negotiations" with EOG Resources to form a joint venture (JV), aimed at developing BP's Coconut field. EOG is set to be the operator of the project, which is akin to an existing arrangement with BP for the Mento project, which connects to EOG's Pelican platform. It has not yet commented on the proposed JV.

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David Campbell, BP's Trinidad and Tobago president, indicated earlier this year that the company's future in the region lies in deep-water exploration, wherein it anticipates larger discoveries. BP is collaborating with Woodside Energy to develop the Calypso gas discovery in these deep waters. Regarding the Coconut JV, BP is working with EOG to secure regulatory approvals and finalize commercial agreements.

This collaboration between BP and EOG Resources represents a strategic effort to bolster gas production in Trinidad and Tobago, ensuring continued supply for both domestic and international markets while supporting the broader ambitions of BP in the LNG sector.

Zacks Rank & Key Picks

BP and EOG Resources currently carry a Zack Rank #3 (Hold) each.

Investors interested in the energy sector may look at a couple of better-ranked stocks like Marathon Petroleum Corporation MPC and SM Energy Company SM, both carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Marathon Petroleum's acquisition of Andeavor has expanded its foothold in the Permian Basin, creating an enviable retail and marketing portfolio. MPC’s emphasis on operational excellence, safety and environmental responsibility, coupled with investments in low-carbon initiatives, positions it well for sustainable growth and continued value creation for shareholders.

The Zacks Consensus Estimate for MPC’s 2024 EPS is pegged at $19.28. The company has a Zacks Style Score of A for Value. It has witnessed downward earnings estimate revisions for 2024 in the past 30 days.

SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.

The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $6.63. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 in the past seven days.

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BP p.l.c. (BP) : Free Stock Analysis Report

EOG Resources, Inc. (EOG) : Free Stock Analysis Report

SM Energy Company (SM) : Free Stock Analysis Report

Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report

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