Back to top

Analyst Blog

Norwegian oil major Statoil ASA (STO - Analyst Report) is considering the divestment of its stake in West Qurna Phase-2 field to Russian giant Lukoil.

The massive West Qurna field in southern Iraq is divided into two phases. West Qurna Phase-1 is being developed by ExxonMobil Corporation (XOM - Analyst Report) and Royal Dutch Shell (RDS.A - Analyst Report).

The gigantic Phase-2 oilfield is estimated to hold approximately 12.9 billion barrels of oil. Statoil and Lukoil had inked a 20-year field development contract in December 2009, with an aim to raise output to 1.8 million barrels per day within a period of six years. Per the deal, Statoil has the right to divest its stake to another company after receiving consent from the oil ministry.

Statoil, Lukoil and Iraq’s North Oil Company are partners in the West Qurna Phase-2 field with stakes of 18.75%, 56.25% and 25%, respectively. Statoil is looking to dispose its stake in the field because of rising social insecurity amid escalating political tension.

Statoil has for long been contemplating abandoning operations in Iraq. The company wants to focus on less risky areas and is planning substantial investments in areas such as offshore Norway and in the United States.

Statoil has received approval from the Iraqi oil ministry with respect to selling its stake to Lukoil and the deal is in its final stages, per market sources.

Over the last few quarters, Statoil has been divesting low-profit generating assets, in particular the ones that do not fit its long-term growth plan, and collaborating on lucrative deals in an attempt to streamline its operations. Accordingly, this divestiture deal is reflective of the company’s long-term outlook.

Statoil holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. For the long term, we maintain a Neutral recommendation on the stock.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%