Worley’s (ASX:WOR) Monday announcement it will work with energy supermajor Shell on the latter’s Dutch Holland Hydrogen 1 (HH1) facility has failed to cause a stir amidst a larger red day for the Australian energy sector.
However, that red day for energy stocks doesn’t tell the whole story – despite Worley’s average daily share turnover on a 4 week basis reflecting over 1M shares, on Monday, only 175K have moved on the market.
A general lull in momentum underpinning the once-much-discussed hydrogen thematic may be to blame. While hydrogen was the talk of the town in 2021, it quickly fell off as oil prices rose through the COVID years on the back of supply shocks.
Suddenly, the new wonder fuel of the future gave way to the old world black gold.
The excitement is yet to bounce back. Still in early 2024, the hydrogen thematic remains dull compared to the excitement it produced only 3 years ago.
This comes as global oil and gas investment continues to clock record highs around the world, and as the windfall profits of supermajors through the early 2020’s stole the oxygen from hydrogen sentiment.
However, a subdued response from the ASX could also be because Worley made no mention of how much the contract would be worth in its Monday announcement.
At any rate, like the EV market, it appears to be the EU where the hydrogen industry is the most pronounced.
Working on-site the Rotterdam-based Shell project, Worley will be responsible for design and construction, including the integration of offshore wind assets into a power grid. A refinery component also defines HH1.
Worley will use its support teams in India to deliver services through its Dutch office “while leveraging our global hydrogen subject matter expertise.”
For such an announcement – teaming up with Shell is usually the kind of thing that you’d expect to cause excitement – Worley chief Chris Ashton’s commentary was surprisingly brief.
”We are pleased to continue partnering with Shell to support its journey to net-zero emissions by 2050, which is consistent with our own purpose of delivering a more sustainable world,” Ashton wrote.
He didn’t write anything else.
But should the contract value prove to be substantial, it’s possible the market could be missing out on an opportunity – no less than 10 brokers rate Worley a “Buy” as of Monday 11 March.
Worley shares were down -1.25% to $16.62 in mid-afternoon trades.