BP or Shell

[Alaric]

There's a new topic in HYP-P

viewtopic.php?f=15&t=24194

Anyone wanting to compare the merits of the two in a manner which didn't ignore their respective share prices might be better posting here.

[dealtn]

Remind me what the "H" in that particular strategy stands for again (I don't think you can post that question over there)?

[tjh290633]

Remind me what the "H" in that particular strategy stands for again (I don't think you can post that question over there)?

You know very well what it means. HYP=High Yield Portfolio.

TJH

[dspp]

There's a new topic in HYP-P

viewtopic.php?f=15&t=24194

Anyone wanting to compare the merits of the two in a manner which didn't ignore their respective share prices might be better posting here.

A,

Both are good organisations by and large. As a generalisation I prefer shell due to the internal company culture and the processes and decisions that arise from that. However one big event - good or bad - can be material even for companies of these sizes. Therefore I personally weighted 2 to 1 in my portfolio in favour of shell over BP to split the risk. My comments are on the basis of knowing both companies by the way.

Regards, dspp

[gbjbaanb]

IIRC Shell has already decided to move away from oil, in a calm and measured manner, to renewables and related technologies, whereas BP is sticking to oil as much as possible.

Given the world's attitudes, oil prices, future technology, Shell's approach probably makes more sense.

[dspp]

"From International Oil Company to Integrated Energy Company: bp sets out strategy for decade of delivery towards net zero ambition"

https://www.bp.com/en/global/corporate/ ... ition.html

Pivoting to low carbon energy and customer focus
10-fold increase in low carbon investment by 2030, with up to 8-fold increase by 2025

"Within 10 years, bp aims to have increased its annual low carbon investment 10-fold to around $5 billion a year, building out an integrated portfolio of low carbon technologies, including renewables, bioenergy and early positions in hydrogen and CCUS. By 2030, bp aims to have developed around 50GW of net renewable generating capacity – a 20-fold increase from 2019 – and to have doubled its consumer interactions to 20 million a day. "

My rough calculation is that BP is aiming to have 1/3 of capex going into renewables by 2030. I am not sure that will be fast enough.

regards, dspp

[richfool]

Neither for me. (Neither BP nor Shell).

I hold JLEN and TRIG (renewable energy). Dividend yields are good too.

[jackdaww]

i hold both - within IT's CTY LWI LWDB MRCH MUT and ETF vuke .

also renewables JLEN GRID UKW TRIG .

[Alaric]

Following the dividend cuts and assuming no changes in the dollar exchange rate and that the new dividends are maintained for at least 4 quarters, I think the prospective yields would be 4.3% for Shell and 5.7% for BP. That's based on prices of 1143.4 and 281.05, dividends of $0.016 and $0.0525 and the exchange rate being 1.307.

A difference of 1.4% in BPs favour in terms of dividend yield is easily lost in price performance and not much of a basis for stock selection whatever a "Strategy" might say.

https://www.dividenddata.co.uk/dividend ... ?epic=RDSA

[dspp]

(Reuters) - BP (BP.L) will need to invest tens of billions of dollars over the next decade and may have to accept lower returns than it can get from oil if it is to meet its target of becoming one of the world’s largest renewable power generators.

https://uk.reuters.com/article/us-bp-re ... KKCN2550ZE

- dspp

[scrumpyjack]

The uncertainties of the future for oil companies are huge and big companies tend not to be good at exiting their historic business and moving to greener fields. It seems more likely to me that new more agile operators will carve out the profitable provision of renewable energy in the future than that big old oil will do so, with all their legacy issues.

If BP really puts its mind to this, then maybe it is possible, but I am sceptical. Presumably a lot of capital will be released internally if they stop exploration and the capitalised cost of their existing assets gradually unwinds as they are depreciated. But to do this they will also need to cut back hard on dividends as their cash flow will be needed for the new investments.

I can’t see that big oil is an attractive investment with such an uncertain future.