) saw mixed investor reaction after it awarded the engineering
framework agreement for the Johan Sverdrup field in North Sea to
Aker Solutions. The shares surprised with a 0.3% drop on the day
of the announcement but continued to move up for the next three
trading sessions to close at $23.88 per share on Dec 26, 2013.
Considered one of the largest oil discoveries on the Norwegian
Continental Shelf - the Johan Sverdrup is forecasted to produce
for over 30 years. The latest award represents the first
front-end engineering design (FEED) contract for the first phase
of the development. The FEED contract is estimated to cost NOK
The upgrade of this oilfield is crucial as it is expected to
create value for owners as well as the society beyond 2050. The
development of the field involves establishment of a new field
centre with four installations and related infrastructure in the
The 10-year framework agreement comprises options for viability
and concept studies, FEED and engineering and procurement
management (EPma) for future phases. This is based on a new
contracting strategy for Statoil for large-scale field
developments, facilitating industrialization and standardization
across future phases to boost efficiency and reduce cost.
The other licensees of the field include Lundin Norway, Petoro,
Det Norske oljeselskap and Maersk Oil. The project has a high
priority among all these licensees, whose experience and
knowledge will immensely help in development of the field.
In recent times, Statoil has delivered strong exploration
results, adding significantly to its resource base by making
several high impact discoveries. The latest finds give the
company access to new regions of Norway, Russia, Azerbaijan,
Tanzania as well as Australia. These strengthen the company's
position and pave way for profitable long-term growth.
Statoil carries a Zacks Rank #4 (Sell). Some better-ranked stocks
in the oil and gas sector include
Harvest Natural Resources Inc.
Blueknight Energy Partners, L.P
). All these stocks hold a Zacks Rank #1 (Strong Buy).
BLUEKNIGHT EGY (BKEP): Free Stock Analysis
HARVEST NATURAL (HNR): Free Stock Analysis
STATOIL ASA-ADR (STO): Free Stock Analysis
TESCO CORP (TESO): Free Stock Analysis Report
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