Norwegian energy giant Statoil ASA (STO - Free Report) awarded a contract to an oilfield services firm Subsea 7 for the development of the Aasta Hansteen gas field in the northern part of Norwegian Sea.
The contract is valued at US$380 million and involves the design, coating, fabrication and installation of 19 kilometer of rigid flowlines. Subsea 7 is also responsible for the coating, fabrication and installation of four Steel Catenary Risers (SCRs).
The deal also covers the engineering, procurement, installation and commissioning (EPIC) of rigid spools and monitoring systems for the risers, and protection structures and anchors for the risers, flowlines and the Aasta Hansteer Spar. It also comprises fixing up of the mooring system and transportation of the Spar buoy.
Statoil is the operator of the Aasta Hansteen field and its development marks the first deepwater expansion in the Norwegian Sea. It also holds the number one position in terms of water depth and technology solutions.
Project management and engineering will commence without delay at Subsea 7's offices in Stavanger. On the other hand, offshore operations are expected to start in 2015 and 2016.
Moreover, Statoil also contracted a Norwegian subsea services contractor DeepOcean for the supply and installation of 140 kilometers of fiber optic cable. This was mainly to connect the Aasta Hansteen field to the present infrastructure in the vicinity of the Norne field. This EPIC contract was worth an estimated $28.9 million.
Formerly known as Luva, the Aasta Hansteen gas field is situated on 6706/12 and 6707/10 blocks in the Norwegian zone of the North Sea. Statoil holds a 75% interest in the field and acts as the operator. However, OMV owns 15% and the U.S. energy company ConocoPhillips (COP - Free Report) holds the remaining 10% stake.
Statoil has operations in all major hydrocarbon-producing regions of the world, with an emphasis on the Norwegian Continental Shelf (NCS). Upon the commencement of the Aasta Hansteen field, Statoil expects it to contribute extensively at its equity production. We believe that Statoil is well positioned to sustain its production growth in the next few years on the back of its large resource base at NCS.
Statoil currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next 1 to 3 months. However, other stocks in the energy sector, like Total SA (TOT - Free Report) with Zacks Rank #2 (Buy) and Range Resources Corporation (RRC - Free Report) with Zacks Rank #1 (Strong Buy), display better fundamentals.