Statoil is still trying to find a solution, which will allow the company to participate in the Shtokman project. Both technical and commercial challenges must however be solved before Statoil makes a final investment decision.
It was not possible to arrive at a solution for the Shtokman development within the framework of the Shtokman Development AG (SDAG) joint venture, in which Gazprom, Total and Statoil are joint owners. Statoil has therefore returned its shares in SDAG to Gazprom after the current agreement expired on 30 June.
At the same time, Statoil’s chief executive Helge Lund and senior vice president for the Europe and Asia business cluster Torgeir Kydland have left the board of the joint venture.
Senior vice president Torgeir Kydland has left the board of Shtokman Development AG, but he still believes that Statoil can play a role in the Shtokman project if the conditions are favourable.
Talks are continuing with Gazprom to try to find a commercial solution which will enable Statoil to participate in the Shtokman development.
“We need a commercial concept to justify the large investment,” says Kydland.
“We have a broad and strong portfolio of projects worldwide competing for investments, and Shtokman is competing on the same level as other projects.”
The investment decision has been postponed several times based on framework conditions, high investment costs and uncertain profitability. At the same time, the energy realities have changed. Large natural gas deposits, especially onshore USA, have impacted the gas market fundamentally.
“We have worked with Russia for several decades,” says Kydland.
“Our cooperation with the Russian authorities is good, and in May we signed a cooperation agreement with the Russian company Rosneft. We have come to Russia to stay, and if it is possible to find a common commercial solution for Shtokman we are still interested in joining the project.”
Earlier this year Statoil repatriated most the staff who were deployed to work for SDAG as part of reducing its current joint venture costs.
“The Shtokman field consists of large proven natural gas resources, and field production is possible if we find the right solutions,” says Kydland.
“We have made progress, for example we have found out that we can use the technology we have developed on the Snøhvit field to reduce costs. Russia has also taken steps towards preparing better framework conditions for offshore developments, but we still have some work ahead of us before we can sign any new agreement.”
In connection with the presentation of its second quarter results Statoil wrote down the value of SDAG by NOK 2 billion.
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Look at the Competence of Statoil, the large Snow White Field, only found it on Wifi in English:
http://en.wikipedia.org/wiki/Snøhvit Read Wiki again and it needs up date, old information, but you can click to see maps and more etc.
This I feel gives an up dated story on the now Finished Snow White gas field + now other find up their in the Arctic.
New oil ‘province’ found off Norway
Extension of Norway’s lucrative oil age was further assured on Monday when state oil company Statoil announced another major oil discovery in the Barents Sea. Now the biggest question seems whether Statoil, its partners and Norwegian industry have the capacity to develop yet another oil and gas project, and other international players are expected to rush to join the Arctic action.
Statoil has struck even more oil off Norway, with the help of the "Aker Barents" drilling rig. PHOTO: Aker
The new oil reserves are described as a twin to another major discovery just last year at the Skrugard field, around 230 kilometers off the northern Norwegian city of Hammerfest. Statoil chief executive Helge Lund claimed the volume and reservoir properties of the new discovery at the so-called “Havis prospect,” part of the Skrugard license, “open up a new petroleum province in the North.”
That’s enough to make environmentalists shudder at the prospect of more oil industry activity in sensitive Arctic areas. Lund, however, continues to claim that Statoil is environmentally responsible and he’s been pushing hard for more exploration and extraction in Arctic areas.
Until fairly recently, politicians and even Statoil officials were worrying that Norway’s oil resources would soon run dry, prompting Statoil to invest heavily outside Norway. Now, after other huge discoveries made much farther south of Skrugard as well, the company is hailing the “revitalization” of the Norwegian continental shelf, and claiming that the new discovery confirms “Statoil’s faith” in exploration potential off the Norwegian coast.
Statoil is the biggest partner in Skrugard, with a 50 percent ownership stake, and also is the field’s operator. Statoil’s other partners are the Norwegian state’s director oil investment entity Petoro, with 20 percent, and ENI Norge AS, a unit of the major Italian oil firm ENI, with 30 percent.
Wells at the new Skrugard-Havis discovery, drilled by the rig Aker Barents, indicate volumes estimated to amount to between 200 million and 300 million barrels of recoverable oil equivalents. When paired with the discovery made just seven kilometers away at Skrugard last April, the field can yield as many as 600 million barrels of recoverable oil equivalents, according to Statoil.
Huge economic development potential
Skrugard’s location off the northern Norwegian city of Hammerfest and a large neighbouring terminal and plant at Melkøya can help support the infrastructure needed to extract its oil, according to Lund. The oil and gas field itself also lies around 100 kilometers north of the Snow White gas field in the Barents Sea that sends gas to Melkøya.
“The Havis discovery boosts the development of Skrugard as a versatile new center with processing and transport capacity,” said Erik Strand Tellefsen, Statoil’s vice president for Skrugard development. Lund also claimed the Skrugard-Havis discoveries “will be important for industrial development and will further boost activity in the supplier industry, providing new jobs and generating spin-off effects throughout the region.”
That’s music to the ears of Norwegian politicians keen on boosting economic development in outlying areas, especially in the far north. It also sets environmentalists on the defensive, though, and raises concerns over whether Norway, which already has a low unemployment rate and an offshore industry looking at new boom times, has the capacity to extract all the oil and gas it’s finding.
Statoil exploration chief in Norwegian territory, Gro Haatvedt, hasn’t seemed overly concerned, nor does she think access to oil rigs will limit oil production in the coming years. Her colleagues have claimed Statoil has the staffing, competence and means to reach its production goals, but admit the company depends on support from the entire offshore industry, not least equipment suppliers.
“Our biggest challenge in the short term is acquiring the capacity we need in the supplier markets, so that we manage to carry out all the assignments we face,” Øystein Michelsen, Statoil’s director for activity on the Norwegian continental shelf, said at a press briefing last week.
Views and News from Norway/Nina Berglund