Norwegian oil giant
) and its partner Pertamina Hulu Energi have decided to hand over
their stakes in the deepwater Karama block to the government of
Indonesia. The block is situated offshore Makassar Strait.
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Upon completion of drilling operations at the three wells -
carried out by
) drillship GSF Explorer - both the companies realized that there
is no hydrocarbon reserve in the block.
Per the agreement, the exploration activities performed by
Statoil include the study of geology and geophysics, 3D seismic
and the drilling of three wells.
Statoil has fulfilled all the commitments and obligations of
exploration operations specified in the contract agreement for
six years. The total exploration project in the work area is
estimated to have cost about $271 million. Statoil will be
responsible for the entire cost, as the exploration efforts did
not produce any positive outcome.
As the operator of the block, Statoil held a 51% interest in the
block, while Pertamina Hulu Energi held the remaining 49%
Statoil has operations in all major hydrocarbon-producing regions
of the world, with an emphasis on the Norwegian Continental Shelf
(NCS). This is likely to help the company offset the costs
incurred for exploring the Karama block. We believe the company's
growing upstream presence in the emerging basins of the Caspian
Sea, West Africa and the deepwater U.S. Gulf of Mexico will
enable Statoil to sustain its production growth for the next few
Last month, Statoil purchased a 25% participating interest from
Brazilian metals and mining firm
) in BM-ES-22A in the Espirito Santo Basin, offshore Brazil.
Block BM-ES-22A is operated by
Petróleo Brasileiro S.A.
) with equity of 75%, while Vale holds the remaining 25% stake.
Statoil holds a Zacks Rank #3, which is equivalent to a Hold
rating for a period of one to three months.