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John Murphy
Will North American Oil Firms Benefit from Shell’s Woes in Nigeria?

It=n what will surely end up being a loss, Royal Dutch Shell (RDS-A) is now selling holdings that it owns in Nigeria.  As detailed in another article on this site, the problems that Royal Dutch Shell is having has the share price down by more than 3% for the week, with oil firms suffering in Africa, too.  The worse it looks for Royal Dutch Shell in Africa, the better North American “Big Oil” like Chevron (NYSE: CVX) and Exxon Mobil (NYSE: XOM) and “Small Oil” like Americas Petrogas (TSX: BOE) and Octagon 88 (OCTBB: OCTX) appear to be for investors.

Investors prize stability: that is what the energy sector in North America has to offer as recent events in Africa, Latin America, and the Middle East have clearly demonstrated.

That is even more so with Canadian firms such as Octagon 88, Americas Petrogas, and Suncor Energy (NYSE: SU).  A major holding of Warren Buffett, Suncor Energy is Big Oil is every meaning of the word.  Buffett recently increased his stake in Suncor Energy.  Based in Calgary like Suncor Energy, Americas Petrogas just reported strong quarterly results that featured rising net revenue and improving sales volume.  Although a small cap, Americas Petrogas is engaged in a joint venture with Exxon Mobil, which is a tremendous show of strength for a firm its size. Octagon 88 just received a license to drill on what third-party reports have found to be very promising holdings in Canada.  In terms of large numbers, one article about Octagon 88 stated that it could be ready to join the “billion barrel club.”

There is a strong future for oil and natural gas companies, overall.

A recent report from the US Energy Administration predicted that global consumption will increase 56% by 2040.  Much of that will come from oil and natural.  That naturally makes the energy sector more appealing to investors.  The security and stability of North American operations should make stocks such as Americas Petrogas, Octagon 88, Exxon Mobil, and Chevron even more attractive.




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