Statoil Renews Push into Arctic Oil Basins
September 06 2016 - 11:10AM
Dow Jones News
OSLO—Norway's Statoil ASA said Tuesday that it was pushing
deeper into the Arctic, shopping for Barents Sea drilling licenses
in a bid to add resources and maintain output over the coming
decades.
The 67% state-owned company said it had acquired stakes in four
licenses in Norway's far north from Tullow Oil PLC, after entering
or boosting its holdings in five other Arctic licenses in the past
months, through deals with companies including OMV AG and
ConocoPhillips, at undisclosed prices.
"We're doing this in a very countercyclical manner, meaning that
we were able to pick up these licenses at what we consider to be
very attractive terms," Jez Averty, Statoil's head of exploration
in Norway and the U.K., told The Wall Street Journal in an
interview Tuesday.
As part of the deal with Tullow, Statoil increased its stake in
the 241-million-barrel Wisting discovery in the Hoop area of the
Barents Sea to 35% from 15%, enlarging its footprint in one of the
most promising provinces in Norway's far north, Mr. Averty
said.
"The Wisting discovery has opened up a new petroleum province in
the Barents Sea," he said. "What we're looking to do is to
establish ourselves as one of the leading companies in that
area."
As production in the mature North Sea depletes, the Barents Sea
may hold the key to maintain Statoil's output in the coming
decades. The Arctic basin has been drilled since the 1980s, but at
a slow pace. Companies are still hoping for huge finds in the
Barents Sea, unlike in the North Sea where they are now mainly
looking for smaller discoveries near existing infrastructure, Mr.
Averty said.
Despite a disappointing drilling campaign in 2013 and 2014 to
find additional resources near the Johan Castberg discovery in the
Barents Sea, Statoil is pushing ahead with a significant drilling
campaign in the sea area next year—including the northernmost well
ever drilled off Norway in the Korpfjell prospect, 420 kilometers
(261 miles) north of the northern coastline.
"The Barents Sea will be very decisive in determining future
activity levels and future production on the Norwegian continental
shelf," Mr. Averty said. "At the same time we have to acknowledge
that the risks—the geological risk, the risk that we drill dry—are
very much higher in the Barents."
Mr. Averty shrugged off worries about the costs of Arctic
drilling, saying that even the northernmost part of the Barents Sea
is less challenging to drill than the Norwegian Sea basin farther
south, due to favorable wind and wave conditions and a lack of sea
ice.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com
(END) Dow Jones Newswires
September 06, 2016 10:55 ET (14:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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