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Norwegian energy provider Statoil ASA’s (STO - Analyst Report) offshore oil concession stake purchase from mining giant Vale was approved by the Brazilian government.

This authorizes Statoil to acquire 25% of the BM-ES-22A concession, which consists of two blocks – ES-M-468 and ES-M-527 – in the Espírito Santo basin offshore Brazil, near several other blocks where Statoil is either operator or partner.

The well proved two reservoir levels with 34–36 API oil and currently the discovery is being evaluated by the drilling of the Montanhês well.

Located in the outer Espirito Santo Basin and partly adjacent to the BM-ES-32 concession, where Statoil is a partner, the appraisal of BM-ES-22A was based on the result of the nearby Indra discovery made in 2010.

The Arjuna well was drilled in 2012 as an assessment of the Indra discovery and established that this accumulation stretches into BM-ES-22A, from the nearby block BM-ES-32. The well hit an oil column of 200 meters. A production test proved existence of a good quality reservoir with 29 API oil.

Statoil holds a 25% in the block, while Petrobras, the operator, retains the remaining 75% interest. The transaction is in line with Statoil’s expansion strategy expanding positions in the core exploration areas. The company is currently planning the acquisition of 3D seismic data, which is expected to start in the second quarter of 2014 on the blocks awarded in the 11th Round.

Statoil currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas industry worth considering include Valero Energy Corporation (VLO - Analyst Report), Range Resources Corporation (RRC - Analyst Report) and Helmerich & Payne, Inc. (HP - Analyst Report). All these stocks sport a Zacks Rank #1 (Strong Buy).

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