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Is There Too Much Light Crude On The Market?

Is There Too Much Light Crude On The Market?

Light crude typically sells at…

Statoil Aims For Top Dog In Deepwater Drilling

Deepwater

Statoil has won 13 exploration licenses in the Gulf of Mexico, saying this marks a reset of its campaign in the area. The Norwegian company first entered the Gulf of Mexico in 2004 and to date, is the operator of six producing fields, two under development and one in exploration phase.

The combined value of Statoil’s bids in the latest Central Lease Sale stood at $44.5 million, beating bidders including Hess Corporation, Exxon, and Chevron, and coming second to Shell. The company plans to boost its Gulf of Mexico daily output from the 60,000 barrels it pumped last year to almost 120,000 bpd by 2020, which would rank it among the five biggest producers in the area.

Statoil has made deepwater developments a priority recently. In addition to the Gulf of Mexico, it is also actively working on projects in its native waters, in the North Sea with the giant Johan Sverdrup field, where commercial production is slated to begin in two years, and in the Barents Sea, where it is partnering with other energy majors on several discoveries, including a potentially massive Korpfjell field near the Norwegian-Russian maritime border.

The Norwegian state oil company is also active in Brazil’s deepwater exploration. Last year, amid the price crisis, it paid $2.5 billion for a 66-percent interest in the Carcara field, one of the biggest recent discoveries in the Brazilian shelf, and it is eyeing even more acquisitions in the country.

Related: Busting A Myth: U.S. Dollar Impact On WTI

At the same time, Statoil is working on cost reductions that will make future production from the new fields commercially viable even in a lower oil price environment. Earlier this year the company boasted that it had managed to bring the production costs at Johan Sverdrup to below $30 a barrel, aiming to lower this further to below $25 per barrel.

This cost-cutting has allowed it to revise its drilling plans for this year at lower levels of expenditure than last year.

By Irina Slav for Oilprice.com

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