UBS has identified BP, TotalEnergies and Vår Energi as the leading European energy stocks in its latest Global Equity Framework report, citing structural advantages across valuation, cash returns and operational focus.
The Swiss bank’s endorsement follows BP’s strategic pivot at its February 2025 capital markets day, where the company reversed its predecessor’s 2020 strategy to prioritize oil and gas operations, debt reduction and capital efficiency. BP now produces approximately 2.4 million barrels of oil equivalent per day, primarily from assets in the U.S., North Africa, the Middle East and Latin America. UBS notes the company remains the lowest-valued international oil major while offering the highest dividend yield in its peer group and the strongest oil price leverage due to elevated financial leverage. The new CEO, recruited from ExxonMobil and Woodside, has also overseen asset sales including the disposal of BP’s U.K. North Sea business and its Austrian mobility and EV charging operations to volenergy AG.
TotalEnergies, France’s energy super-major, also features prominently in UBS’s framework, producing roughly 2.4 million barrels of oil equivalent per day. The bank highlights TotalEnergies’ through-cycle profitability as the highest among the five largest oil majors, alongside its position as the world’s second-largest liquefied natural gas producer. The company maintains a diversified earnings base and the lowest financial gearing among European majors, while returning cash to shareholders via regular and special dividends and share buybacks. UBS points to ongoing projects such as the expansion of the Fujairah oil export pipeline in Abu Dhabi and a planned review of Norwegian continental shelf prospects under a new exploration manager.
Vår Energi, a Norwegian-focused producer, rounds out UBS’s top picks with a reported production of about 450,000 barrels of oil equivalent per day, 90% of which originates from Norwegian operations. Eni holds close to 60% of the company, which UBS describes as having a low unit-cost base and an indicated dividend yield near 10%. The bank notes Vår Energi’s second-quarter adjusted earnings of $0.33 per share on revenue of $3.72 billion exceeded analyst expectations. Recent corporate actions include the BlueNord acquisition to enter the Danish Underground Consortium, with synergies expected to cover nearly one quarterly dividend at a 9% dilution for existing shareholders, and a partnership with Equinor and Aker BP for frontier exploration in Norway.
