Reuters reported that according to unidentified sources BP (PA) is in talks with Eni with the aim of offloading its oil and gas assets in Algeria. The two companies are in talks for an outright sale. A potential deal could also allow BP to take stakes in Eni’s assets around the world.
A sale agreement will allow BP to dispose of its Algerian assets, which have struggled to do so since 2019. The company currently holds a 45.89% stake in the Amenas natural gas plant and 33% in the ‘Salah gas plant.
A sale of Algerian assets comes when the main European energy companies divest themselves of their oil and gas portfolios in a context of increased concentration on clean energy. Companies are also looking to refocus their activities to cope with falling margins and increasing debt. (See BP share analysis on TipRanks)
Additionally, BP and Eni are in talks as they seek to form a joint venture that will oversee their operations in Angola. They are also reportedly exploring the possibility of creating a joint venture in Algeria similar to the Angolan model.
In addition, Lightsource bp, a 50-50 joint venture with BP, has entered into a strategic partnership with INSUN to develop five large-scale solar projects in Portugal. The € 900 million solar investment projects are expected to add 1.35 GW of low-carbon renewable energy when completed.
Two weeks ago, analyst Mizuho Daniel boyd reiterated a Hold note on the title. The analyst also raised his share price target to $ 33 from $ 30, implying a potential upside of 25.81% from current levels. The increase comes on growing belief that oil prices will surpass the $ 70 a barrel level on increased demand that is expected to reach pre-pandemic levels in the fourth quarter.
The consensus among Wall Street analysts is a hold based on 4 buy, 3 hold and 2 sell ratings. The average analyst target price of $ 30.12 implies an upside potential of 14.83% over current levels.
BP gets an 8 out of 10 on TipRanks Smart score rating system, suggesting that it is likely to outperform the overall market.
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