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Norwegian giant Statoil ASA (STO - Analyst Report) is initiating the termination process of its full-scale carbon capture project at Mongstad (CCM) following the Norwegian government’s decision to discontinue it. The government finds the project far too costly and the challenges associated with it not worth the risk. The market reacted negatively to the news, and Statoil’s stock price tumbled 1.78% to close at $22.68 on Friday.

In 2006, Statoil had inked an implementation agreement with the Ministry of Petroleum and Energy. In accordance with the agreement, the company submitted a master plan for full-scale carbon capture at Mongstad in 2009. The Technology Centre at Mongstad was completed in 2012 by partners Statoil, Gassnova, Royal Dutch Shell plc (RDS.A - Analyst Report) and Sasol.

Statoil, which is now striving for a smooth termination of CCM, had worked extensively on the challenging work of carbon capture and storage (CCS). Instead of feeling let down, the company plans to use all the lessons picked up in the process for its future endeavors relating to CCS. Statoil has also developed a toolbox for measuring and evaluating emissions in the process.

With years of extensive study, Statoil is among the leading companies working on CCS. The carbon storage project on Sleipner was the first large-scale storage in the world. The other projects of the company include full-scale capture and storage at In Salah in Algeria and the Snohvit field in Norway.

Statoil is also participating in extensive research projects relating to the development of carbon capture technology, which includes storage apart from its Mongstad activities.

Statoil has gained immense knowledge at Mongstad that inspires it to develop the technology as well as cut down on the costs involved.

Statoil carries a Zacks Rank #3 (Hold). However, Zacks Ranked #1 (Strong Buy) stocks of China Petroleum & Chemical Corp. (SNP - Analyst Report) and Range Resources Corp. (RRC - Analyst Report) are good buying options for the short term.

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