) along with its partner
), has been awarded a deep-water exploration block in the Myanmar
waters of Bay of Bengal.
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Located 200 km from the coast, Block AD-10 spans over 9,000 sq.
km and rests at a water depth of about 2,000 meters. Statoil, the
operator of the license, has an equity share of 50% while the
remaining 50% is held by ConocoPhillips.
Statoil will be required to carry out environment and social
impact studies. It will also acquire 2D seismic during the
initial 2.5-year study period. Subsequent to this, both Statoil
and ConocoPhillips will decide on whether to enter into a
three-year exploration period.
The aforementioned contract marks Statoil's venture into a new
country. Notably, the company already has operations in about 34
Moreover, the deal gives Statoil the opportunity to explore a
largely untapped basin, which is considered to have petroleum as
well as thick sedimentary deposits. The basin offers considerable
upside and its exploration is in line with the company's
Myanmar awarded 10 shallow water blocks and 10 deepwater blocks
in an auction process that commenced in Apr 2013. Oil majors such
Royal Dutch Shell plc
), along with Statoil and ConocoPhillips, won exploration rights
in offshore Myanmar.
As per the terms of the agreement, the recipient companies of
deepwater blocks will be able to explore and operate the blocks
on their own, while shallow water block recipients will be
required to partner with a registered local player.
In recent times, Statoil has delivered strong exploration
results, adding significantly to its resource base by making
several high impact discoveries. The latest findings give the
company access to new regions of Norway, Russia, Azerbaijan,
Tanzania as well as Australia. These strengthen the company's
position and pave way for profitable long-term growth.
At present, Statoil has a Zacks Rank #4 (Sell).