Norwegian major Statoil ASA (STO - Analyst Report) announced that it would procure a floating storage and offtake (“FSO”) unit from Teekay Offshore Partners L.P. (TOO - Snapshot Report) . The FSO unit would be utilized in Statoil’s Gina Krog oil and gas field located in North Sea.
The FSO unit would be converted from the 1995-built shuttle tanker, Randgrid, where Teekay Offshore owns a stake of 67%. This unit will commence operations under a 3-year firm period time-charter contract to Statoil, which includes 12 additional one-year extension options. Statoil anticipates having to shell out a total net capital cost of approximately $220 million for acquiring the whole 100% stake in the FSO unit. Statoil expects the transaction to be completed by the first quarter of 2017.
Going forward, Statoil expects to grow its yield by 19% to over 2.5 million barrels per day by 2020 from 2.1 million barrels per day (bpd) currently. The majority of this growth is expected from the U.S., with production projected to increase nearly three times to around 500,000 barrels per day from 150,000 bpd now. The first quarter of 2013 saw growth of nearly 75% from the prior-year quarter. This shows that the company is moving in line with its goal of reaching over 500,000 barrels of oil equivalent per day.
Statoil holds a portfolio of various high-quality assets. In Mar 2013, the company emerged as the highest bidder on 15 leases in the central U.S. Gulf of Mexico (GoM) lease sale. This addition to its portfolio gives it control in over 340 leases in the GoM and helps it to maintain its leadership position.
The company retains interest in several major discoveries in the GoM, including the recently approved Julia field, Stampede, Vito and its first GoM-operated Logan discovery.
The Julia field has five leases in the ultra-deepwater Walker Ridge area of the Gulf of Mexico, which is 265 miles southwest of New Orleans. The resource is located 30,000 feet below the surface of the ocean. The ownership of the Julia unit is equally shared between the operator, ExxonMobil Corporation (XOM - Analyst Report) and Statoil. The oil field includes six wells with subsea tie-backs to Chevron Corporation’s (CVX - Analyst Report) production facility Jack & St. Malo.
Statoil currently carries a Zacks Rank #3 (short-term Hold).