Norway-based Statoil ASA (STO - Analyst Report) has completed the sale of its 24.1% interest in a natural gas transport infrastructure joint venture – Gassled – to the Solveig Gas Norway AS consortium. The transaction is valued at NOK 17.35 billion, per the announcement made on June 6, 2011.
Solveig Gas Norway AS is a holding company in which Canada Pension Plan Investment Board has an interest of approximately 40%, Allianz Capital Partners (a subsidiary of Allianz SE) holds 30% and the remaining 30% is held by Infinity Investments SA, a wholly owned subsidiary of the Abu Dhabi Investment Authority.
Formed in 2003, the Gassled joint venture is Norway's integrated gas transportation system and processing facility that distributes most of the gas production on the Norwegian Continental Shelf to consumers on the European continent and in the United Kingdom.
With the completion of the sale, Statoil owns a 5% interest in Gassled and remains the technical service provider. Other joint venture partners in Gassled are Total SA (TOT - Analyst Report), ExxonMobil Corporation (XOM - Analyst Report), Royal Dutch Shell (RDS.A - Analyst Report), Norsea Gas, ConocoPhillips (COP - Analyst Report), Eni SpA (E - Analyst Report), DONG, GDF Suez and RWE Dea Norge.
Statoil plans to redeploy the proceeds raised from the sale of its interest in Gassled into assets which can yield higher rates of return. This reflects Statoil’s continuous effort to increase shareholder value and capital efficiency.
We have a favorable outlook on Statoil’s long-term production growth, given the company’s growing upstream presence in the emerging basins of the Caspian Sea, West Africa and the U.S.deepwater Gulf of Mexico.
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.