Shell plc’s SHEL subsidiary, Shell Nigeria Exploration and Production Company (SNEPCo), announces a significant final investment decision (FID) in Bonga North, a deep-water project off the coast of Nigeria. The project is a subsea tie-back to an existing Bonga Floating Production Storage and Offloading (FPSO) facility, which is operated by SHEL.

An Insight Into SHEL’s Bonga North Project

Bonga is a deep-water development located at water depths of more than 1,000 meters. The original Bonga FPSO has been in production since 2005 with a capacity of around 225,000 barrels of oil per day.

The Bonga North project involves the drilling and completion of about 16 wells. Out of which, eight will be production wells and the remaining eight will serve water injection purposes. Under the project, the company will also enhance the existing main FPSO along with the installation of new subsea hardware.

With an estimated recoverable resource volume of more than 300 million barrels of oil equivalent, the project will sustain the oil and gas production at the Nigerian facility and targets to achieve 110,000 barrels per day, with the first oil expected to be delivered by the end of the decade. The project will help the company maintain stable levels of liquid production out of its upstream portfolio and generate cash into the next decade.

SHEL’s Partnership for Nigeria’s Energy Future

The partnership project at Nigeria’s Bonga North is operated by SNEPCo, which holds a 55% stake, with other partners like Esso Exploration and Production Nigeria Ltd. holding 20%, Nigerian Agip Exploration Ltd. holding 12.5% and TotalEnergies Exploration and Production Nigeria Ltd. holding the remaining 12.5% under the Nigerian National Petroleum Company Limited.

Shell’s upstream portfolio has the potential to deliver benchmark performances through opportunities like the Nigerian Bonga project, enhancing its technical expertise and a model built on strong partnership and simplification.

SHEL’s Zacks Rank and Key Picks

London-based Shell is one of the primary oil super-majors — a group of the U.S. and Europe-based big energy multinationals with operations that span almost every corner of the globe. Currently, SHEL has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like Suncor Energy Inc. SU,ARC Resources Ltd. AETUF and Flotek Industries, Inc. FTK. While Suncor Energy currently sports a Zacks Rank #1 (Strong Buy), ARC Resources and Flotek Industries each carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Canada-based Suncor Energy is a premier integrated energy company. The company's operations include oil sands development and upgrading, conventional and offshore crude oil and gas production, petroleum refining and product marketing. The Zacks Consensus Estimate for SU’s 2024 earnings indicates 0.26% year-over-year growth.

Canada-based ARC Resources is engaged in the exploration, acquisition and development of oil and natural gas properties. AETUF’s expected EPS (earnings per share) growth rate for next year is 51.59%, which aligns favorably with the industry growth rate of 11.70%.

Flotek Industries develops and delivers prescriptive chemistry-based technology, including specialty chemicals, to clients in the energy, consumer industrials and food & beverage industries. The Zacks Consensus Estimate for FTK’s 2024 earnings indicates 125% year-over-year growth.

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