Norwegian operator
Statoil ASA
(
STO
) has awarded Norwegian service provider Aker Solutions a frame
agreement, spanning four years, to provide wireline tractor
services on the Norwegian Continental Shelf (NCS).
Per the agreement, Aker will deliver wireline tractor services to
the platforms that Statoil operates off Stavanger, Norway. It also
covers platforms of Statfjord, Volve, Sleipner, Snorre, Gudrun,
Dagny and Ermintrude.
The deal also includes certain fields in the Norwegian Sea -
Morvin, Aasgard, Trestakk, Kristin, Heidrun, Norne, Njord,
Tyrihans, Mikkel, Yttergryta, Alve, Urd, Aasta Hansteen, Snohvit
and Hyme.
Besides the fixed awarded scope, the contract carries an option of
delivering wireline tractor services from mobile drilling and light
well intervention units functional in Stavanger, on contract with
Statoil.
The frame agreement will be operational from 2013 through 2017. It
carries two additional two-year options. Currently, Statoil has a
recovery rate of 50% on their fields and aims to augment it by
another 10% to reach 60%. The services of Aker are likely to assist
Statoil in achieving its targets.
Statoil has been receiving wireline tractor services from Aker
since 1996. The wireline tractor has replaced the requirement for
more heavily equipped and costly well conveyance methods. It can
press well intervention equipment several kilometers down the
highly deviated and horizontal wells. Thus, it is more economical
to use and considerably lowers the risk.
This new contract emphasizes Statoil's belief in the exploration
potential of the mature region of NCS.
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 Barrents Sea, West Africa and the deepwater
U.S. Gulf of Mexico. We also believe that the growing share of
natural gas in Statoil's NCS volume mix and its extensive interests
in infrastructure assets facilitates a leadership position in the
European natural gas market.
Statoil, which recently contracted
Schlumberger Limited
(
SLB
) for electric wireline logging services on the NCS, holds a Zacks
#2 Rank (short-term Buy rating). Longer term, we maintain our
Neutral recommendation.
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