Statoil Halts Snorre B Production - Analyst Blog


Norwegian energy firm, Statoil ASA ( STO ) has temporarily stopped oil production at its Snorre B platform in the North Sea and vacated one fourth of its employees personnel from the facility. The move followed the detection of a soil shift under a drilling template, followed by an oil leak.

As per the Norwegian Petroleum Directorate (NPD), Snorre field in the northern part of the North Sea is Norway's fourth-biggest oil producer. In 2013, output from the field averaged 88,000 barrels of oil per day.

The field has two production platforms - Snorre B and Snorre A. Statoil declined to provide breakdown between these. Notably, Snorre A is operating normally.

The first shutdown at Snorre B occurred on Saturday after a subsea robot noticed a pit under the drilling template, which helps to link the underwater site to the semi-submersible platform at the water surface.

Another shutdown took place on Monday when an oil leak was discovered. The platform manager ordered the removal of some staff from the platform as a precautionary measure.

Of the total 136 employees at Snorre B, about 33 were moved to an adjacent floating accommodation facility.

Statoil holds 33.3% stake in the production license. The other partners include state-owned Petoro, ExxonMobil Corporation ( XOM ), Idemitsu Petroleum, RWE and Core Energy, which have 30%, 17.4%, 9.6%, 8.6% and 1.1% stake, respectively.

Statoil has operations in all major hydrocarbon-producing regions of the world, with an emphasis on the Norwegian Continental Shelf (NCS). We believe that the company is well positioned to sustain the steady production growth for the next few years on the back of its large resource base at NCS.

At present, Statoil carries a Zacks Rank #3 (Hold). Some better-ranked oil and gas stocks worth considering include Encana Corp ( ECA ) and CVR Refining, LP ( CVRR ). All of these stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: NPD , NCS , CVRR , ECA , STO

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