Tuesday, June 21, 2011

Statoil Eyes $32 Billion Investment over the next two years; Plans to increase production to above 2.5 mmboepd over the next 10 years

Norwegian oil giant Statoil ASA will spend $32 billion on exploration and production over the next two years as it aims to ramp up production to above 2.5 mmboepd over the next decade. Statoil, which produces about 80 percent of Norway’s oil and gas, is expanding abroad to maintain output and boost reserves amid dwindling production from aging North Sea fields. The company plans to double oil output in Brazil in less than a decade, and is seeking to add to its portfolio.

In addition to continued focus on production from operations on the Norwegian Continental Shelf (NCF), Statoil said the increased output will come through strengthened positions in the Gulf of Mexico, Brazil, Angola, the Caspian region and Arctic Sea, while also stepping up production of shale gas and liquids. "The NCF remains a very attractive and globally competitive province for future oil and gas activities," said, Statoil Chief Executive, Helge Lund.

As well as conventional oil and gas operations, Statoil is developing the Eagle Ford shale field in southwestern Texas through a joint venture with Talisman Energy Inc. and the Marcellus shale region together with Chesapeake, which includes northern West Virginia across Pennsylvania and parts of New York.

View the Eagle Ford Shale deal snapshot here:

Source: The Derrick E&P Transactions Database
Growing Market:
Statoil will “benefit from our strong gas position in a growing gas market,” said Lund. Oil and gas from sites along the Norwegian coast will account for about 1.4 million barrels of oil equivalent a day in 2020, the company estimated. The international portfolio, which will also include non-Norwegian Arctic sites and the Caspian region, is forecast to produce about 1.1 million barrels of oil a day, Statoil said.

The company will spend $16 billion on exploration, drilling and production in 2012, on par with what it will spent in 2011. Statoil expects to drill 20 to 25 high-impact wells in the years 2011 to 2013.

The company in February 2011 forecast output will grow on average 3 percent in each of the next two years, to about 2 million barrels of oil equivalent a day, below a former target of 2.06 million to 2.16 million barrels. "The positive is that they are announcing growth internationally to 1.1 million barrels in 2020, and they are quite specific about that, given that they haven't quite delivered recently," said Trond Omdal, an analyst at Arctic Securities.

Exploration would be about $3 billion this year, up from about $2.5 billion in 2010 when the company trimmed spending in the wake of the global financial crisis, Tim Dodson, head of the company's exploration arm, told Reuters.

Reserves have been in decline, with a replacement ratio of just 87 percent in 2010 and 73 percent in 2009. Oil and gas production in Norway, which accounts for about half of the company's total output, is expected to be above 1.4 million boed in 2020, the level it produced in 2010.

Statoil's Exploration Portfolio for 2011 and 2012:

Source Documents:

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