) is initiating the termination process of its full-scale carbon
capture project at Mongstad (CCM) following the Norwegian
government's decision to discontinue it. The government finds the
project far too costly and the challenges associated with it not
worth the risk. The market reacted negatively to the news, and
Statoil's stock price tumbled 1.78% to close at $22.68 on Friday.
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In 2006, Statoil had inked an implementation agreement with the
Ministry of Petroleum and Energy. In accordance with the
agreement, the company submitted a master plan for full-scale
carbon capture at Mongstad in 2009. The Technology Centre at
Mongstad was completed in 2012 by partners Statoil, Gassnova,
Royal Dutch Shell plc
) and Sasol.
Statoil, which is now striving for a smooth termination of CCM,
had worked extensively on the challenging work of carbon capture
and storage (CCS). Instead of feeling let down, the company plans
to use all the lessons picked up in the process for its future
endeavors relating to CCS. Statoil has also developed a toolbox
for measuring and evaluating emissions in the process.
With years of extensive study, Statoil is among the leading
companies working on CCS. The carbon storage project on Sleipner
was the first large-scale storage in the world. The other
projects of the company include full-scale capture and storage at
In Salah in Algeria and the Snohvit field in Norway.
Statoil is also participating in extensive research projects
relating to the development of carbon capture technology, which
includes storage apart from its Mongstad activities.
Statoil has gained immense knowledge at Mongstad that inspires it
to develop the technology as well as cut down on the costs
Statoil carries a Zacks Rank #3 (Hold). However, Zacks Ranked #1
(Strong Buy) stocks of
China Petroleum & Chemical Corp.
Range Resources Corp.
) are good buying options for the short term.