Shell stock was trading at $49.04 on Wednesday at 12:49 PM EDT.
To diversify its portfolio of renewable energy sources globally, Shell (NYSE:SHEL) purchased Nigeria’s Daystar Power on Wednesday for an unknown sum, according to the Financial Times. This was the company’s first power sector transaction in Africa.
Daystar offers solar and hybrid power systems with battery storage to commercial and industrial clients in Nigeria, Ghana, Togo, and Senegal. The Daystar acquisition is reportedly much less expensive than either of those transactions. In comparison to Spring’s 2 gigawatts of operating capacity in India, the Nigerian company has an installed producing capacity of about 32 megawatts. Since its founding in 2017, Daystar has raised $92 million in funding, including a $20 million facility from the International Finance Corp of Washington.
By 2025, Daystar will have 400 MW of installed solar power, up from its current 32 MW, thanks to a funding infusion from Shell (SHEL). Daystar will also be able to extend its service area beyond West Africa to include the eastern and southern regions of the continent.
According to Thomas Brostrom, Shell’s executive VP for renewable energy, the Daystar transaction is “a significant step for Shell in extending our presence in emerging power markets.” Manika Premsingh recently published a pessimistic analysis on Seeking Alpha, saying that despite Shell’s excellent value, it appears to be a good opportunity to sell.
In Nigeria, Shell has a lengthy and troubled history. It was the first business to find oil in the nation in 1956, and it has led to the sector’s growth throughout the years. However, it has been under fire from civil society organizations in recent years for its struggles to control crime and environmental problems in several of its projects. The agreement comes after Shell bought renewable energy companies around the world in the previous year, including the Indian company Spring Energy in April for $1.55 billion and the US-based Savion in December 2021.
Shell Plc issues a press release for the second quarter of 2022.
Shell stock, future outlook
Shell stock has increased by 33% YoY, but since mid-2022, it has primarily been trading flat, suggesting the possibility that the company’s finest days are behind it. However, high gas prices could be able to sustain it for a little while longer, given its tight association with oil prices and the unfavorable macroeconomic forecast for 2023.
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