Statoil Seeks Approval for Delta 2 - Analyst Blog


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Norwegian major Statoil ASA ( STO ) along with its partners has formally handed over its plan for the development and operation (PDO) of the Delta 2 field off Norway to the authorities.

This would be the eleventh fast-track development for Statoil and is estimated to cost around NOK 7.4 billion ($1.3 billion). The fast-track projects are an effort by the state-run operator to expedite the development of time-critical resources utilizing existing field infrastructure.

Delta 2 is estimated to have recoverable reserves of 77 million barrels of oil equivalent, of which oil is 38%. The field will be developed using two subsea templates tied back to the centre of Oseberg field in the North Sea, enhancing the overall yield from the veteran producer.

Located in a water depth of about 100 meters, the field is anticipated to begin production by the end of 2014 with peak production targeted at 18,000 barrels of oil equivalent per day. The field time is expected to be almost two decades. The investment decision for the Delta 2 project was made in Dec 2011.

The fast-track projects are likely to augment Statoil's equity production. Towards the end of 2014, these projects are likely to generate 100,000 barrels of oil equivalent daily (boe/d). The execution time on fast-track projects has been reduced to half when compared to ordinary projects. Many of the discoveries currently being developed would not have been profitable in the absence of a fast-track concept. This concept is appropriate for making the development of limited discoveries profitable.

Statoil, the operator of Delta 2, holds 49.3%. The other partners including state holding company Petoro AS, Total SA ( TOT ) and ConocoPhillips ( COP ) have a share of 33.6%, 14.7% and 2.4%, respectively.

Statoil carries a Zacks Rank #3 (Hold). However, Zacks Ranked #1 Enerplus Corporation ( ERF ) appears more attractive and is expected to outperform over the next few months.

CONOCOPHILLIPS (COP): Free Stock Analysis Report

ENERPLUS CORP (ERF): Free Stock Analysis Report

STATOIL ASA-ADR (STO): Free Stock Analysis Report

TOTAL FINA SA (TOT): Free Stock Analysis Report

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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 Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: COP , ERF , PDO , STO , TOT

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