BP plc BP signed a memorandum of understanding (“MoU”) with the government of Egypt to explore the possibilities for building a renewable hydrogen production facility in the country.
Per the MoU, BP will assess the technical and commercial feasibility of developing a large-scale green hydrogen export hub in Egypt. The company will explore high-potential locations across the country for renewables as part of the survey.
Egypt has exceptional renewable energy assets. BP invested more than $35 billion in the country over the years. The company operates the West Nile Delta gas development. It also has a strong presence in the East Nile Delta through its Pharaonic Petroleum Company, joint venture and other partners’ operating assets. The company currently produces about 70% of Egypt’s gas.
Hydrogen is considered one of BP’s five energy transition growth drivers. The company is engaged in a portfolio of options for developing green and blue hydrogen projects in advantaged markets globally. This includes potential developments in the U.K., the Netherlands, Germany, Spain, the Middle East, the United States and Australia.
Green hydrogen is expected to play a key role in transitioning from hydrocarbons to more sustainable alternatives. It is produced by the electrolysis of water, powered by renewable energy.
Expanding its business scope in Egypt validates BP’s long-term commitment to the country. The MoU depends on Egypt’s attempt to be a regional energy hub and support the country’s energy transition plans.
Last month, BP signed another MoU with the government of Mauritania to explore the potential for green hydrogen production in the country. BP is currently involved in the global green and blue hydrogen projects, including H2Teesside and HyGreen Teesside, two major projects being developed in the U.K.
Shares of BP have outperformed the industry in the past six months. The stock has gained 4.5% against the industry’s 0.1% decline.
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Zacks Rank & Key Picks
BP currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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