Statoil Acquires Stakes in 2 Total North Sea Projects

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Norway’s Statoil ASA (NYSE: STO) announced this morning that it has acquired stakes in two North Sea projects from France’s Total S.A. (NYSE: TOT). The transaction, valued at $1.45 billion, includes a 51% equity stake in the Martin Linge field and a 40% stake in the Garantiana discovery, both located on Norway’s continental shelf.

Martin Linge is an oil and gas field under development west of the Oseberg field in the North Sea, with estimated recoverable resources in excess of 300 million barrels of oil equivalent. The expected production lifetime extends into the 2030s. The acquisition raises Statoil’s stake in the project to 70%.

Garantiana is an oil discovery north of the Visund field in the North Sea with a recoverable resource potential between 50 million to 70 million barrels of oil equivalent. Development concepts are currently being evaluated. Prior to this transaction, Statoil had no equity interest in Garantiana.

Arne Sigve Nylund, Statoil’s executive vice president for Development & Production Norway, said:

This transaction adds competitive growth assets to our portfolio on the Norwegian continental shelf. The Martin Linge project features innovative solutions to enhance safety, capture value and reduce emissions, in line with our strategy. By leveraging Statoil’s operational experience and existing contracts, we can realise additional opportunities and synergies from these assets.

The platform for the Martin Linge operation is scheduled to be delivered from Samsung’s South Korean shipyard early next year and production is expected to begin in the first half of 2019.

Following the completion of the transaction, Statoil becomes the operator of both assets.

Statoil was recently fined $4 million by the U.S. Commodities Futures Trading Commission for attempting to manipulate energy markets in 2011. A bigger blow, from which the share price is only just recovering, was the Norwegian sovereign wealth fund’s announcement that it would reduce its holdings in energy stocks. The government’s two-thirds ownership of Statoil is held separately from the sovereign wealth fund. And even then, the fund is decidedly underweight energy with just 4% of assets in oil and gas stocks.