Statoil to cut risk and cherrypick new wells
NORWEGIAN state-owned Statoil ASA, the country's biggest oil and gas producer, will be more discriminating in picking exploration targets to reduce risk and control spending.
Statoil will concentrate on areas where it has made recent discoveries, including Angola, Tanzania, Brazil, the Gulf of Mexico, Canada and Norway, Head of Exploration Tim Dodson said yesterday. It will probably exit countries such as Mozambique.
"We'll be much more selective in taking on other new opportunities," Mr Dodson said in Oslo. "We can choose what we move forward with, and of course we will be more selective on that because we want to manage our capital investments."
Statoil's exploration resulted in 1.5 billion barrels of new resources last year and almost 900 million barrels so far in 2013, the most of any energy producer in terms of conventional output, company data shows.
Statoil has also sold Norwegian assets and borrowed money to fund the rising spending and dividends amid escalating costs for the industry.
Investment in exploration next year will be similar to that in 2013, when the company plans to spend $3.75bn (€2.8bn) on about 60 wells, according to Mr Dodson, who said that quantity may fall in 2014.
Statoil previously forecast average capital expenditure of $21bn a year from 2013 to 2016; the figure this year is more like $19bn.
As many as 25 of next year's wells will be drilled off Norway, according to the company, which is 67pc-owned by the country's government and based in Stavanger.
Statoil will also operate two wells off Angola next year, two off the Faroe Islands and one or two in the US Gulf of Mexico, Mr Dodson said. It will drill six off Tanzania, international exploration chief Nick Maden said yesterday.
As Statoil hones its exploration targets, it may leave areas where wells have proven unsuccessful. The East African country of Mozambique, where it drilled a dry well this year, "could be an exit candidate", Mr Dodson said.
One area of focus will be eastern Canada, where Statoil is looking at additional drilling near its offshore Bay du Nord discovery from 2015.
"There's plenty more to be done in that area, there's a lot of new structures, a lot of new prospects," Mr Dodson said.
Statoil said last month it's not "wedded" to its goal of increasing production by a quarter to 2.5 million barrels of oil equivalent a day by the end of the decade. (Bloomberg)