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Norwegian giant Statoil ASA (STO - Analyst Report) has kicked off seismic survey work in the Sea of Okhotsk, located in far east Russia. The survey is part of Statoil’s exploration pact with Russia’s state-owned giant Rosneft.

The 2D seismic data will cover 10,000 kilometers in the Kashevarovsky, Lisyansky and Magadan-1 licenses. These three licenses are estimated to hold total recoverable reserves of about 13.7 billion barrels of oil equivalent. The research vessel Akademik Fersman will be employed for the survey.

The dense ice coverage and rough weather conditions in the Arctic waters of Okhotsk, off Sakhalin Island, have added difficulties in operating the region. A severe storm in the area in 2011 had turned over the jackup drilling rig Kolskaya resulting in a loss of 53 lives.

Under a joint venture (JV) with Rosneft, Statoil will also carry out exploration in the Perseevsky license in the Barents Sea. With a stake of 33.33% in the JV, Statoil is expected to finance all exploration costs.

Recently, Italy’s Eni SpA (E - Analyst Report) initiated seismic survey work in the Fedynsky and Central Barents license areas, in Russia’s sector of the Barents Sea, as part of Eni’s exploration pact with Rosneft. Similarly, ExxonMobil Corporation (XOM - Analyst Report) also began seismic work on its acreage under a pact with Rosneft.

Statoil’s endeavor to improve recovery of resources in mature fields is noteworthy. The company has operations in all major hydrocarbon-producing regions of the world, with an emphasis on the Norwegian Continental Shelf (NCS). We believe that Statoil is well positioned to sustain steady production growth for the next few years on the back of its large resource base at NCS.

Statoil carries a Zacks Rank #4 (Sell).  However, the Zacks Ranked #1 (Strong Buy) W&T Offshore, Inc. (WTI - Snapshot Report) is expected to outperform in the near term.
 

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