Norwegian giant Statoil ASA (STO - Free Report) has been ordered to improve the working condition at its Heimdal platform. The directive came from the country’s safety watchdog – Norwegian Petroleum Safety Authority (PSA).
The basis of this order can be traced back to the May 2012 accident that released around 3,500 kilograms of gas. It was a serious gas emission that produced a potentially combustible cloud around the facility.
After an investigation of the Heimdal platform by the PSA, several regulatory breaches by Statoil were revealed that led to the mishap.
The leak took place during the examination of two emergency shutdown valves on the Heimdal drilling, production and accommodation platform. The PSA considers it one of the most serious gas emissions off Norway, in recent years.
The Norwegian company has already worked on its shortcomings. Yet, the safety agency has condemned it for failing to correctly execute the improvement measures taken up since the leak.
The Heimdal order, with a March 1 deadline, entails Statoil to establish the reasons for the ineffective corrective measures. It also mandates the effectiveness of future measures and requires Statoil to ensure that other facilities are not disturbed by similar deficiencies.
Statoil is a major international integrated oil and gas company. Though the company has operations in all major hydrocarbon-producing regions of the world, it has an upstream focus on the Norwegian Continental Shelf. Due to its strong offshore exposure, Statoil is a leader in subsea production.
Statoil holds a Zacks Rank #3, which is equivalent to a Hold rating for a period of one to three months. However, other stocks in the oil and gas sector, like Breitburn Energy Partners LP , Penn Virginia Corporation and Memorial Production Partners LP , hold a Zacks Rank #1 (Strong Buy) and are expected to perform better.