Reuters reported that according to unidentified sources BP (BP) is in talks with Eni as it looks to offload its oil and gas assets in Algeria. The two companies are in talks for an outright sale. A potential deal could also result in BP receiving stakes in Eni’s assets around the world.
A divestment deal will allow BP to dispose of its Algerian assets, having struggled to do so since 2019. The company currently holds a 45.89% stake in the Amenas natural gas plant and a 33% stake in the Salah gas plant.
A sale of the Algerian assets comes when Europe’s top energy companies are divesting oil and gas portfolios amid increased focus on clean energy. The companies are also looking to refocus their businesses to address falling margins and rising debt. (See BP stock 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 believed to be exploring the possibility of creating a joint venture in Algeria similar to the Angolan model.
Separately, Lightsource bp, a 50-50 joint venture with BP, has entered into a strategic partnership with INSUN to develop five utility-scale solar projects in Portugal. The €900 million solar investment projects should add 1.35GW of low carbon, renewable power once complete.
Two weeks ago, Mizuho analyst Daniel Boyd reiterated a Hold rating on the stock. The analyst has also raised his stock price target to $33 from $30, implying 25.81% upside potential to current levels. The raise comes on a growing belief that oil prices will power through the $70 a barrel level on increased demand which is expected to hit pre-pandemic levels in Q4.
Consensus among analysts on Wall Street is a Hold based on 4 Buy, 3 Hold, and 2 Sell ratings. The average analyst price target of $30.12 implies 14.83% upside potential to current levels.
BP scores an 8 out of 10 on TipRanks’ Smart Score rating system, suggesting it is likely to outperform the overall market.