Norwegian energy giant
) and its partners have decided to halt expansion work at the
Snoehvit natural gas field in the Arctic Barents Sea. Expansion
activities are dependent on new gas discoveries and the current
reserves are insufficient for any further work.
SCHLUMBERGER LT (SLB): Free Stock Analysis
STATOIL ASA-ADR (STO): Free Stock Analysis
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The company may build a pipeline for future capacity increase but
at present there is not enough gas in place for a new liquefaction
facility at Snoehvit.
Statoil had been planning the Snoehvit expansion over the past 18
months. However, the company will now focus on its existing
liquefied natural gas (LNG) facility at Melkoya (Train I) and
Snoehvit through phases 2 - 4 for Train I.
However, despite the setback, Statoil remains committed to the
Arctic, as evident from its announcement to invest about 40 billion
Norwegian crowns ($6.99 billion) in its Snoehvit natural gas field
to continue production until 2040.
Statoil ASA is a Norway-based major international integrated oil
and gas company. The company emerged in its present shape following
the acquisition of Norsk Hydro's oil and gas business, which was
completed on October 1, 2007. With effect from November 2, 2009,
the erstwhile StatoilHydro ASA came to be known as Statoil ASA.
We have a favorable outlook on Statoil's long-term production
growth, given the company's growing upstream presence in the
emerging basins of the Barents Sea, West Africa and the deepwater
U.S. Gulf of Mexico (GoM). We also believe that the growing share
of natural gas in Statoil's NCS volume mix and its extensive
interests in infrastructure assets facilitate its leadership
position in the European natural gas market.
Statoil, which recently contracted
) for electric wireline logging services on the NCS, carries a
Zacks #2 Rank, which translates to a Buy rating for a period of one
to three months. Longer term, we maintain a Neutral recommendation
on the stock.