With BP moving to develop the second phase of Venezuela’s Loran gasfield and foreign capital edging back into one of the world’s largest hydrocarbon regions, the stakes for integrated oil and gas majors are shifting in real time. This could reshape supply expectations, trade flows and cash generation for certain stocks while leaving others on the sidelines. This article explains how three stocks from our Integrated Oil & Gas Majors screener are positioned for this new chapter.

The three integrated oil and gas stocks covered below are just a starting sample from this idea. The full screen surfaced 9 more companies with equally detailed narratives that are not covered here. To size up the wider peer group and identify which integrated majors best fit your own thesis, go straight to the Integrated Oil & Gas Majors screener.

Phillips 66 (PSX)

Phillips 66 is an integrated energy company that runs refineries, pipelines, fuel marketing, chemicals and renewable fuels across the US and Europe. Most of its revenue comes from refining and marketing activities, which generated about US$98.8b and US$97.1b respectively, with midstream and renewable fuels adding several tens of billions more in total sales. With a market value of roughly US$90b, it sits among the larger global downstream focused energy stocks.

Investors who want exposure to rising crude and product flows into the US Gulf Coast may find Phillips 66 worth a closer look. Management says the refineries can run about 250,000 barrels a day of Venezuelan crude without extra spending, which could matter as Venezuela reopens and heavy crude differentials shift. At the same time, the company has been using strong refining margins to fund sizeable buybacks and debt reduction, while still paying a dividend. The flip side is meaningful leverage, director churn and earnings that analysts expect to soften from recent highs. How those moving parts interact with new Venezuelan supply and Phillips 66’s expanding midstream footprint is the key decision point for you as an investor.

Refining strength and fresh Venezuelan crude options could be masking what really matters for Phillips 66 right now. Get the full story, including capital returns, balance sheet pressure and one risk that could flip the script in the 3 key rewards and 2 important warning signs (1 is major!)

Build your own integrated energy shortlist

Phillips 66 and the other two integrated stocks in this article all came from the same screener, and you can spin up your own version in a few clicks. Use our customisable Screener to mix filters on valuation, growth, balance sheet strength, risks and dividends, or jump straight into our curated Investing Ideas for ready made starting points.

Shell (LSE:SHEL)

Shell is one of the world’s largest integrated energy and petrochemicals companies, spanning upstream oil and gas, LNG, refining, chemicals and a growing set of low carbon solutions. It generates substantial revenue from Marketing at about US$135b and from Chemicals and Products at roughly US$132b, with Integrated Gas contributing around US$49b and Upstream about US$44b. Shell’s size is reflected in its scale, with a market value of roughly £182.6b.

Shell gives you rare scale across oil, gas, LNG, trading and retail just as Venezuela’s resources start to open up again. Management is already working on Venezuelan gas projects like Dragon and Loran and talking about tying those volumes into existing LNG hubs, which could create a long pipeline of projects if conditions stay supportive. At the same time, the stock screens as inexpensive on earnings, even after a year of strong profits, buybacks and cash returns. The catch is that earnings are expected to soften, returns on equity are only mid teens and dividends have not always been steady, so you are not getting a risk free yield story. The real question is how that mix of new reserves, LNG growth and capital returns stacks up against those risks over the next chapter.

Shell’s mix of LNG potential, Venezuelan gas exposure and an earnings multiple that screens as inexpensive raises a clear question for you as an investor. For a more detailed view, see the analysis report for Shell.

Eni (BIT:ENI)

Eni is an integrated energy group that explores for and produces oil and gas, runs refining and chemicals, supplies gas and power, and is building out biofuels, renewables and electric vehicle charging across Europe and beyond. Most revenue currently comes from Exploration & Production at about €55.7b, Refining and Chemicals at roughly €19.3b, Enilive at around €21.3b and Global Gas & LNG Portfolio and Power at about €17.5b. With a market value of about €69.1b, Eni sits firmly in the large cap integrated majors peer group.

Eni offers a mix of large upstream projects, growing LNG exposure and newer transition businesses such as biofuels and renewables. These are backed by recent earnings that analysts describe as high quality and a P/E that screens below peers. Management is also increasing its focus on Venezuela at a time when access to its gas and oil is opening up again, which could be important given Eni’s long history and existing blocks there. The trade off is that revenue is expected to decline in coming years, dividends are not fully backed by free cash flow and the group still depends on higher risk external borrowing, so investors are being paid to take project and balance sheet risk that not everyone will be comfortable with.

Eni’s mix of lower P/E, Venezuela exposure and newer transition assets could be masking where the real upside sits. See how the trade off between growth projects, funding risk and cash returns stacks up in the 3 key rewards and 2 important warning signs (1 is major!)

Seeking Alternatives Before Momentum Flies Past

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.