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Norway’s oil major Statoil is exploring for lighter oil offshore Norway and Brazil, and is not pursuing oil sands or heavy oil development, because it’s assessing the carbon and cost competitiveness of the oil varieties, chief executive Eldar Sætre said in an interview with Reuters published on Tuesday.
“A lot of fossil fuels will have to stay in the ground, coal obviously...but you will also see oil and gas being left in the ground, that is natural,” Sætre said, speaking to Reuters in London before Norway’s US$1-trillion oil fund proposed last week to drop oil and gas stocks—US$35 billion worth of shares—from its equity benchmark index.
“At Statoil we are not pursuing certain types of resources, we are not exploring for heavy oil or investing in oil sands. It is really about accessing the most carbon-efficient barrels,” Sætre told Reuters.
“The world needs to develop more efficient barrels... Competitiveness to me is carbon competitiveness and cost competitiveness,” the top Statoil executive said.
Major global oil producers like Canada and Venezuela produce mostly heavy oil.
At the beginning of this year, Statoil sold its entire oil sands operations in the Canadian province of Alberta to Athabasca. The transaction was the first of a series of big companies announcing divestments in Canada’s oil sands. Shell sold some oil sands interests as part of its strategy to focus on free cash flow and higher returns on capital, and to prioritize businesses such as integrated gas and deep water. ConocoPhillips sold oil sands assets in Canada to Cenovus in a US$13.3 billion deal.
Statoil has a ‘lower-carbon’ agenda and a strategic ambition to allocate 15-20 percent of its annual investments towards new energy solutions in 2030, the Norwegian group said in its Energy Perspectives 2017 report.
“Statoil will gradually build a material position in profitable renewable energy projects and low-carbon solutions,” the oil and gas major says.
Yet, Statoil will continue to focus on oil and gas for decades in order to meet demand, Sætre told Reuters.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.