BP & Partners Greenlight $2.9 Billion Shah Deniz Gas Field Expansion

BP plc BP, the British energy giant, has announced that the Shah Deniz consortium has reached a final investment decision to invest $2.9 billion toward advancing the development of the Shah Deniz gas field in the Azeri Caspian Sea. The investment will be utilized for the new Shah Deniz Compression project, the next development phase of this gas field.

BP holds operational control of the Shah Deniz project in Azerbaijan. The British energy giant owns a 29.9% stake in the field alongside several other companies, including LUKOIL of Russia, TPAO of Turkey, SGC of Azerbaijan, NICO, and Hungary’s MVM. The expansion project for this field will focus on accessing low-pressure gas reserves in the field and boosting the field’s production capacity. Additionally, this should help the consortium maximize resource recovery from the field.

The expansion of the Shah Deniz field is expected to raise production levels and exports from the field. Notably, the company expects output to increase approximately 50 billion cubic meters of gas and roughly 25 million barrels of condensate over the productive life of the field. In 2024, the field produced 28 billion cubic meters of gas and 35 million barrels of condensate, according to BP. The Shah Deniz field is a major gas-producing field in Azerbaijan that contributes greatly to the energy security in the region.

The new expansion project, which follows two previously implemented development stages, shall enhance production recovery from the field, allowing it to maintain its position as a global energy supplier for several decades. Azerbaijan’s energy supply is highly reliant on mature oilfields in the Caspian Sea. For the next five years, the country intends to keep its oil output at 582 thousand barrels per day by attracting investments from Western energy companies.

BP has maintained its partnership with Azerbaijan for over 30 years. The investment in the Shah Deniz Compression project aligns with BP’s strategic reset (announced in February 2025) to reduce investments in low-carbon and renewable energy solutions while shifting its focus on oil and gas. The company is currently aiming to grow its upstream business and generate increased value for its shareholders.

BP’s Zacks Rank & Key Picks

BP currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks from the energy sector are Flotek Industries Inc. FTK, Energy Transfer ET and RPC, Inc. RES. While Flotek Industries sports a Zacks Rank #1 (Strong Buy) at present, Energy Transfer and RPC carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flotek Industriesspecializes in green chemistry, which provides innovative solutions aimed at reducing the environmental impact of the energy industry. Flotek develops specialty chemicals tailored for both domestic and international energy producers, as well as oilfield service companies. These chemicals not only help reduce the environmental impact of hydrocarbon production but also lower operational costs.

Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 130,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, ET’s outlook seems positive.

RPC generates strong and stable revenues through a diverse range of oilfield services, including pressure pumping, coiled tubing and rental tools. The company is strongly committed to returning value to its shareholders through consistent dividend payments and share buybacks, making it an attractive choice for investors seeking steady returns.

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This article originally published on Zacks Investment Research (zacks.com).

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