Statoil in huge gas field deals
Norwegian oil company Statoil announced on Monday that it was selling off five North Sea gas fields and greatly reducing its takes in three more, in a deal valued at more than USD 1.6 billion. Statoil can use the money to help pay for development of new oil and gas fields that have priority in both the North Sea and the Barents. The buyer is British energy firm Centrica, formerly part of British Gas and now the second-largest gas producer and seller in the UK. In addition to taking over the gas field interests, Centrica also has committed to buy more gas from Statoil from 2015 to 2025 in a separate deal valued at more than NOK 100 billion.
Prime Minister Jens Stoltenberg hailed the deals as helping to secure jobs within the Norwegian oil and gas industry, because it ensures gas sales and provides resources for further expansion in the North Sea and development of new discoveries at the Aldous/Avaldsnes fields in the North Sea and the Skrugard field in the Barents. British Prime Minister David Cameron, meanwhile, also praised the deal, saying it would help “ensure the continued security and competitiveness of gas supplies Britain, from a trusted and reliable neighbour.”
Chris Huhne, UK Secreatry of State for Energy and Climate Change, called the deal “good news for Britain.” He said that gas “powers nearly half of our electricity and nearly 70 percent of heating” and the deal with Statoil “will help to deliver that gas securely and cheaply, and further enhance our close relationship with Norway.”
Statoil will sell off its stakes in the Skrine-Byggve, Fulla, Frigg-Gamma-Delta, Vale and Rind fields, where it owned stakes ranting from 10 percent (in Skrine-Byggve) to 50 percent (Fulla). Statoil will reduce its stakes in the Kvitebjørn (from 58.6 to 39.6 percent), Heimdal (from 39.4 to 29.4 percent) and Valemon fields (from 66.8 to 53.8 percent). The sale involves around 34,000 barrels of oil equivalents per day, and will boost Centrica’s own production by around 25 percent, reported website dn.no. The gas involved is transported and exported through the established pipeline infrastructure Vesterled, Langeled and FLAGS via a Tampen Link, reported Statoil.
The Norwegian company said no workers would lose their jobs, though. “There will be some transferring, since some workers will need to move to new areas, but no one will lose their jobs,” Statoil spokesman Ola Anders Skauby told Norwegian Broadcasting (NRK). Statoil is the second-largest supplier of gas to Europe and has long-standing ties to the UK gas market. It has a current market share in the UK of around 18 percent, or about 20 percent of all the gas Statoil exports from the Norwegian continental shelf.
Helge Lund, Statoil’s chief executive officer, said the deals with Centrica were of “high strategic importance.” Analysts seemed satisfied as well, with one at securities firm Pareto in Oslo telling dn.no that he thought Statoil achieved a good price for its gas field interests.
Source: http://www.newsinenglish.no/category/business; Views and News from Norway, Nina Berglund, November 2011
