BP & Shell Want a Piece of India’s Increasing Oil Production

Oil and gas company BP (BP) has promised to increase oil production at India’s Mumbai High field by 44% to 65.41 million tons. The company also says it will increase gas output by 89% to 112.63 billion cubic meters (BCM). This comes alongside a long-term agreement naming BP as a technical service provider for the field over the next decade.

BP’s deal with Mumbai High field owner Oil and Natural Gas Corp includes a fixed fee during the first couple of years. Following that, BP will receive a service fee from net incremental production. The new deal starts in the next fiscal year beginning in April and BP expects full production by 2027 or 2028.

BP will likely benefit from this arrangement as India seeks to increase its oil and gas production. The country expects the increase in production at the Mumbai High field will bring in $10.30 billion in additional revenue.

Shell Joins BP to Increase India Oil Production

Oil and Natural Gas Corp’s tender to increase production at the Mumbai High field also attracted Shell’s (SHEL) attention. It’s unclear how much of a role the company will hold in the field, but Oil and Natural Gas Corp notes the company took part in the tender.

Shell is looking for new ways to produce additional oil and gas amid warnings of lowered production. That comes alongside a $400 million writedown for its oil discovery in Namibia, which the company has ruled isn’t commercially viable.

BP vs. SHEL Stock: Which is the Better Investment?

Turning to Wall Street, there are stark differences between the investment potential of BP and SHEL shares. Shell offers a better opportunity for investors with its Strong Buy rating and $78.97 price target, representing a potential 22.02% upside for SHEL stock. In comparison, BP has a Moderate Buy rating with a $35.73% price target, representing a possible 14.81% upside for the shares.

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