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Norwegian major Statoil ASA (STO - Analyst Report) saw mixed investor reaction after it awarded the engineering framework agreement for the Johan Sverdrup field in North Sea to Aker Solutions. The shares surprised with a 0.3% drop on the day of the announcement but continued to move up for the next three trading sessions to close at $23.88 per share on Dec 26, 2013.

Considered one of the largest oil discoveries on the Norwegian Continental Shelf – the Johan Sverdrup is forecasted to produce for over 30 years. The latest award represents the first front-end engineering design (FEED) contract for the first phase of the development. The FEED contract is estimated to cost NOK 650 billion.

The upgrade of this oilfield is crucial as it is expected to create value for owners as well as the society beyond 2050. The development of the field involves establishment of a new field centre with four installations and related infrastructure in the first phase.

The 10-year framework agreement comprises options for viability and concept studies, FEED and engineering and procurement management (EPma) for future phases. This is based on a new contracting strategy for Statoil for large-scale field developments, facilitating industrialization and standardization across future phases to boost efficiency and reduce cost.

The other licensees of the field include Lundin Norway, Petoro, Det Norske oljeselskap and Maersk Oil. The project has a high priority among all these licensees, whose experience and knowledge will immensely help in development of the field.

In recent times, Statoil has delivered strong exploration results, adding significantly to its resource base by making several high impact discoveries. The latest finds give the company access to new regions of Norway, Russia, Azerbaijan, Tanzania as well as Australia. These strengthen the company’s position and pave way for profitable long-term growth.

Statoil carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the oil and gas sector include Harvest Natural Resources Inc. , Blueknight Energy Partners, L.P (BKEP - Snapshot Report) and Tesco Corp. (TESO - Snapshot Report). All these stocks hold a Zacks Rank #1 (Strong Buy).