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ExxonMobil, TotalEnergies Likely to Get Stake in Qatar Project
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Exxon Mobil Corporation (XOM - Free Report) and TotalEnergies SE (TTE - Free Report) might be the potential winners in acquiring a stake in the North Field expansion project to increase Qatar’s gas exports, per a Bloomberg report.
The project came as Western countries sought alternative supplies after phasing out purchases of Russian oil over its aggressive invasion of Ukraine.
ExxonMobil and TotalEnergies are already part of Qatar’s liquefied natural gas (“LNG”) industry. In 2021, the two majors joined several energy companies in submitting bids to be associated with the LNG expansion project. Notably, the North Field expansion project is regarded as the world’s largest LNG project.
Qatar announced the North Field expansion project last year, which is expected to raise the nation’s LNG production capacity from 77 million tons per annum (MMtpa) to 110 MMtpa. The $30-billion project is likely to commence production in the fourth quarter of 2025.
Qatar plans another expansion phase at the North field. The second expansion phase will be the North Field South (“NFS”) project, further lifting Qatar’s LNG production capacity from 110 MMtpa to 126 MMtpa. Production is expected to begin in 2027.
Qatar has been delaying the decision regarding the project for at least two years. Although a decision has been reached, an official announcement about the winners is yet to be made.
For TotalEnergies, a deal might relieve investors’ concerns over its delayed growth in LNG. The company’s withdrawal from Russia resulted in suspended funding for the major Arctic LNG 2 project. TotalEnergies had taken a $4.1-billion impairment charge on its Arctic LNG 2 gas project under construction in Russia.
In 2021, TotalEnergies suspended work on the Mozambique LNG project and declared force majeure due to fighters linked to ‘Islamic State.’ The company expects the ongoing Russia-Ukraine conflict to result in a loss of 2,000-3,000 barrels of oil production per day from Russia and a lower production from the country’s refineries.
Company Profile & Price Performance
Headquartered in Irving, TX, ExxonMobil is one of the leading integrated energy companies in the world.
Shares of ExxonMobil have outperformed the industry in the past six months. The stock has gained 68.7% compared with the industry’s 47.3% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
PetroChina Company Limited is the largest integrated oil company in China. PTR is expected to witness an earnings growth of 44% in 2022.
In the first quarter of 2022, PetroChina’s upstream (or exploration and production) segment posted an operating income of RMB 38.8 billion, more than tripling from the year-ago profit of RMB 12.9 billion. This primarily resulted from the sharply higher crude price.
EQT Corporation (EQT - Free Report) is primarily an explorer and producer of natural gas. EQT is expected to witness an earnings growth of 200% in 2022.
Almost 65% of EQT’s production in 2022 is hedged, thereby securing the best risk-adjusted upside in natural gas. EQT has lower exposure to debt capital than composite stocks belonging to the industry. Hence, the company can rely on its strong balance sheet to sail through the volatility in commodity prices.
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ExxonMobil, TotalEnergies Likely to Get Stake in Qatar Project
Exxon Mobil Corporation (XOM - Free Report) and TotalEnergies SE (TTE - Free Report) might be the potential winners in acquiring a stake in the North Field expansion project to increase Qatar’s gas exports, per a Bloomberg report.
The project came as Western countries sought alternative supplies after phasing out purchases of Russian oil over its aggressive invasion of Ukraine.
ExxonMobil and TotalEnergies are already part of Qatar’s liquefied natural gas (“LNG”) industry. In 2021, the two majors joined several energy companies in submitting bids to be associated with the LNG expansion project. Notably, the North Field expansion project is regarded as the world’s largest LNG project.
Qatar announced the North Field expansion project last year, which is expected to raise the nation’s LNG production capacity from 77 million tons per annum (MMtpa) to 110 MMtpa. The $30-billion project is likely to commence production in the fourth quarter of 2025.
Qatar plans another expansion phase at the North field. The second expansion phase will be the North Field South (“NFS”) project, further lifting Qatar’s LNG production capacity from 110 MMtpa to 126 MMtpa. Production is expected to begin in 2027.
Qatar has been delaying the decision regarding the project for at least two years. Although a decision has been reached, an official announcement about the winners is yet to be made.
For TotalEnergies, a deal might relieve investors’ concerns over its delayed growth in LNG. The company’s withdrawal from Russia resulted in suspended funding for the major Arctic LNG 2 project. TotalEnergies had taken a $4.1-billion impairment charge on its Arctic LNG 2 gas project under construction in Russia.
In 2021, TotalEnergies suspended work on the Mozambique LNG project and declared force majeure due to fighters linked to ‘Islamic State.’ The company expects the ongoing Russia-Ukraine conflict to result in a loss of 2,000-3,000 barrels of oil production per day from Russia and a lower production from the country’s refineries.
Company Profile & Price Performance
Headquartered in Irving, TX, ExxonMobil is one of the leading integrated energy companies in the world.
Shares of ExxonMobil have outperformed the industry in the past six months. The stock has gained 68.7% compared with the industry’s 47.3% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PetroChina Company Limited is the largest integrated oil company in China. PTR is expected to witness an earnings growth of 44% in 2022.
In the first quarter of 2022, PetroChina’s upstream (or exploration and production) segment posted an operating income of RMB 38.8 billion, more than tripling from the year-ago profit of RMB 12.9 billion. This primarily resulted from the sharply higher crude price.
EQT Corporation (EQT - Free Report) is primarily an explorer and producer of natural gas. EQT is expected to witness an earnings growth of 200% in 2022.
Almost 65% of EQT’s production in 2022 is hedged, thereby securing the best risk-adjusted upside in natural gas. EQT has lower exposure to debt capital than composite stocks belonging to the industry. Hence, the company can rely on its strong balance sheet to sail through the volatility in commodity prices.