) has ramped up the Norwegian Barents exploration campaign and
raised its Arctic technology research budget by threefold.
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As of now, Statoil's exploration venture in the Barents - located
in the Hammerfest basin, north of Finnmark County in northern
Norway − involves participation of 89 exploration wells out of the
total 94 drilled. The company now intends to boost the campaign by
drilling nine additional Statoil-operated wells by next year.
Statoil remains upbeat about the Barents Sea venture following its
Skrugard and Havis oilfield discoveries last year that are
estimated to hold 400 million to 600 million barrels of oil
equivalent. The company is expected to drill four wells at Nunatak,
near Skrugard from December for six months. This campaign will
continue with the drilling of two or three wells in the Hoop
frontier exploration area further north, next year in summer. This
marks the northernmost wells ever drilled in Norway.
The Norwegian giant aims to maintain its non-stop drilling
activities in 2013 in the area, as it is not disturbed by sea ice
because of a warm-water current that flows in from the North
Atlantic. The Norwegian Barents is supposed to be the only
year-round ice-free zone in the Arctic.
Royal Dutch Shell Plc
) faced difficulties for its drilling of its first exploration
wells in the Chukchi Sea off Alaska due to sea ice and troubles in
receiving Coast Guard certification for its oil spill recovery
vessel. The U.K. behemoth now expects to complete only two of the
five wells for the Chukchi and Beaufort Seas in 2012.
Meanwhile, Statoil has expressed that it has created a technology
road map for its operations in the severe most Arctic areas. This
includes trebling the existing Arctic research budget to NOK250
million ($34 million) in 2013 from NOK 80 million ($11 million) in
2012. The extended investment further fortifies Statoil's supremacy
in energy exploration and production in the region.
In May, Statoil and Russian state-owned oil company OAO Rosneft
entered into an agreement to jointly explore and develop Russian
offshore deposits in the Barents Sea and Sea of Okhotsk. The
venture is expected to involve an investment of approximately $100
billion over decades.
The agreement calls for the exploration of the Perseevsky license
in the Russian part of the central Barents Sea and three licenses -
the Kashevarovsky, Lisyansky and Magadan-1 - north of Sakhalin
island in the Sea of Okhotsk. Both parties intend to jointly
explore, with Statoil holding 33.33% in each activity. Although
Statoil has already completed drilling 89 wells in the Barents Sea,
Rosneft has no offshore experience.
According to the U.S. Energy Information Administration, the Arctic
region is expected to have more than 400 billion barrels equivalent
of recoverable oil and gas yet to be discovered.
We remain upbeat on Statoil's upstream initiatives and its
significant discoveries in the mature North Sea as well as in the
Barents Sea that reaffirm the potential of the Norwegian
Statoil retains a Zacks #2 Rank (short-term Buy rating).