BP approves expansion of West Papua LNG project at meeting with Indonesia's new president

BP plc (BP), a leading UK-based energy company, and its partners in the Tangguh production sharing contract have announced the final investment decision for the $7 billion Tangguh Ubadari CCUS Compression (“UCC”) project in Papua Barat, Indonesia. The project is poised to unlock approximately 3 trillion cubic feet of additional gas resources, aligning with BP’s strategy to meet Asia's growing energy demand while advancing its low-carbon commitments.

The Tangguh UCC project is set to feature Indonesia’s first large-scale implementation of carbon capture, utilization, and storage (CCUS) technology. This innovative approach aims to sequester 15 million tons of CO2 in its initial phase, with potential for further expansion due to the area’s substantial storage capacity. The project includes developing the Ubadari gas field and enhancing existing infrastructure at the Tangguh LNG facility, which already boasts a liquefaction capacity of 11.4 million tons per year.

Production from the Ubadari field is expected to begin in 2028, further solidifying the region's role in providing sustainable energy solutions.

BP CEO Murray Auchincloss, during a meeting in London with Indonesian President H.E. Prabowo Subianto, highlighted the project's dual significance. He noted that it unlocks substantial gas resources while marking a milestone for Indonesia by incorporating CCUS technology to enhance gas recovery. Auchincloss also underscored BP’s long-standing presence in Indonesia, leveraging over 55 years of experience and strong local partnerships to drive this groundbreaking development.

The Tangguh UCC project aligns with BP’s disciplined financial framework, meeting its return hurdle rates and reinforcing its focus on value-driven investments. With Tangguh UCC, BP continues to lead in leveraging technology and innovation to meet the dual challenge of energy security and decarbonization, setting a benchmark for future projects in the region.

BP’s Zacks Rank & Key Picks

BP currently carries a Zack Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like Smart Sand, Inc. SND, FuelCell Energy FCEL and Nine Energy Service NINE, each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Smart Sand is a low-cost producer of high-quality Northern White frac sand, an ideal proppant for hydraulic fracturing and various industrial applications. The company provides proppant and other logistics services for several companies in the oil and gas industry. With sustained oil and gas market demand, SND is expected to see growing demand for its services, reflecting a positive outlook.

FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.

Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. The company operates across key prolific basins in the United States, including the Permian, Eagle Ford, MidCon, Barnett, Bakken, Rockies, Marcellus and Utica, as well as throughout Canada. With a sustained demand for oil and gas in the future, the demand for NINE’s services is anticipated to increase, which should position the company for growth in the long run.

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Energy stocks were leaning lower pre-bell Friday as the Energy Select Sector SPDR Fund declined by 0.1% recently.

The United States Oil Fund was down 0.1% and the United States Natural Gas Fund was 4.2% lower.

Front-month US West Texas Intermediate crude oil was 0.5% lower at $69.73 per barrel on the New York Mercantile Exchange. Global benchmark North Sea Brent crude oil lost 0.6% to $73.80 per barrel, and natural gas futures were down 5.1% at $3.17 per 1 million British Thermal Units.

Equinor is reducing its renewable energy unit's staff by 20%, the equivalent of nearly 250 full-time jobs, a spokesperson said. Equinor shares were down more than 1% premarket.

BP said it has made a final investment decision to go ahead with the $7 billion Tangguh Ubadari carbon capture, utilization, and storage compression project in Indonesia on behalf of its production sharing contract partners. BP shares were down 0.5% pre-bell.

Exxon Mobil and partners withdrew from talks with Guyana's government on terms for exploring and developing a shallow-water oil block, Reuters reported, citing Guyana's Vice President Bharrat Jagdeo. Exxon Mobil shares were 0.3% lower premarket.

London stocks gained on Thursday as Russia's nuclear threat yesterday drove up global oil prices, positively impacting oil and gas majors BP (BP.L) and Shell .

The FTSE 100 index was 0.79% higher at closing.

"Intensification of the Russia-Ukraine War, and the use of non-nuclear but unconventional methods, should be expected into January," said Macquarie, noting that the nuclear threat was only meant to bully and divide the West. "But traders may eye the promise of peace in 2025 to buy any nuclear-risk dips."

In the economic corner, investors cheered the faster-than-expected improvement in manufacturing orders. The net balance of new orders in the UK manufacturing sector increased to -19% in November from -27% in October, the Confederation of British Industry's industrial trends survey showed Thursday. The CBI reading surpassed the consensus estimate of -25%.

"Output has underperformed expectations in recent months, with manufacturers pointing to uncertainty around the UK Budget, the US elections and recent political instability in Europe as among the factors leading customers to pause or cancel orders," said CBI Lead Economist Ben Jones. "Many firms still need to work through the implications of the Budget for their own plans for pay, hiring and investment, but it's an encouraging sign that output volumes are expected to return to growth in the quarter ahead."

In corporate news, shares of JD Sports Fashion (JD.L) plunged 15.50% on Thursday closing after the sneaker and sports fashion retailer said it expects fiscal 2025 profit before tax and adjusting items to be at the lower end of its guidance range of between 955 million pounds sterling and 1.04 billion pounds.

"We think that JD Sports should maintain its position as a preferred partner of major sportswear brands like Nike and adidas, given its strong retailing skills, ability to appeal to more urban/cash customers and its opportunity to drive its apparel offer with its elevated stores," said RBC Capital Markets. "We also think improvements are coming through in governance, which should reassure investors, however execution risk is probably higher than average given the company's pace of expansion."

Halma's bottomline rose year over year in the first half of fiscal 2025 to 136.2 million pounds from 118.5 million pounds on higher revenue. The September results drove the British safety equipment company's stock up 5.72% on closing.

BP plc BP, the British energy major, has signed a Production Sharing Agreement (“PSA”) with Trinidad and Tobago in the shallow water block NCMA 2. BP’s subsidiary won an offshore bidding round hosted by Trinidad and Tobago last year. The agreement allows for the exploration and production of natural gas in the shallow water block.

The PSA is aimed at increasing the country's natural gas output to boost the supply of its liquefied natural gas (LNG) facilities. Trinidad and Tobago’s natural gas supply has been dwindling in recent years, and as such, the country is struggling to increase output to feed its LNG facilities. The country’s Ministry of Energy and Energy Industries is actively promoting exploration and production activities in the upstream segment by marketing available concessions to attract investments.

Block NCMA 2 lies in the North Coast Marine Area of Trinidad. The water depth at the site is approximately 200 meters. This is the second agreement signed by Trinidad and Tobago to increase the country's natural gas output. The first agreement was signed in September 2024 with Shell plc for the Modified U(c) block. This block attracted the maximum attention among the 13 areas presented in the shallow water auction by the Caribbean country last year.

BP’s Zacks Rank and Key Picks

Currently, BP carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are Smart Sand, Inc. SND, FuelCell Energy FCEL and Nine Energy Service NINE, each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Smart Sand is a low-cost producer of high-quality Northern White frac sand, an ideal proppant for hydraulic fracturing and various industrial applications. The company provides proppant and other logistics services for several companies in the oil and gas industry. With sustained oil and gas market demand, SND is expected to see growing demand for its services, reflecting a positive outlook.

FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.

Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. The company operates across key prolific basins in the United States, including the Permian, Eagle Ford, MidCon, Barnett, Bakken, Rockies, Marcellus and Utica, as well as throughout Canada. With a sustained demand for oil and gas in the future, the need for NINE’s services is anticipated to increase, which should position the company for growth in the long run.

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