Shell plc SHEL has secured a win for a shallow water block from the government of Trinidad and Tobago, outpacing bids made by other energy giants like BP and EOG Resources. With Trinidad and Tobago's declining natural gas output, the nation is struggling to provide sufficient gas to its liquefied natural gas and petrochemical facilities.

The government is seeking to increase its natural gas production rates and has organized bidding rounds to attract producers to advance exploration and production activities in the country. It is also urging producers to achieve the initial output from offshore projects to raise production.

Shell owns a majority stake in Trinidad’s Atlantic LNG project, along with BP. This project has a production capacity of 15.3 million tons per annum. The two companies have been trying to increase the supply of gas for the liquefaction trains of the project. As such, Shell’s victory against other bidders for the shallow water block is indeed significant for the company.

Shell is currently in talks with the government of the Caribbean nation to finalize the terms for working on the Modified U(c) block. This block attracted the most attention among the 13 areas that were presented in the shallow water auction by the government in the previous year. According to official data, these 13 areas hold an estimated 13.4 trillion cubic feet of gas.

SHEL’s Zacks Rank and Key Picks

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

Some better-ranked stocks in the energy sector are PEDEVCO Corp. PED, TechnipFMC FTI and VAALCO Energy EGY. PEDEVCO presently sports a Zacks Rank #1 (Strong Buy), while TechnipFMC and VAALCO Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. PED stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, as well as in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations. Combined with bullish oil prices, this is expected to boost the company's production and overall profitability.

TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company’s total backlog witnessed a record high of $13.9 million in the second quarter of 2024, indicating a year-over-year increase of 4.51%. This growing backlog ensures strong revenue growth for FTI.

VAALCO Energy is an independent energy company involved in upstream business operationswith a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Acreage of Canada, EGY’s production outlook seems bright.

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