Norwegian energy major Statoil ASA (STO) has obtained a substantial working interest in a large chunk of an Indonesian block. The Halmahera II block – located in a frontier basin in Eastern Indonesia– is considered as ‘exclusive’ as no wells have been drilled so far in its proximity.
The exploration license covers an acreage exceeding 8,000 square kilometers and is subject to final government approval. Statoil will operate the license with an 80% working interest with Toronto-listed Niko Resources as its partner holding the remaining 20% interest.
The Halmahera II license is situated next to the Obi and Halmahera-Kofiau licenses, acquired early in 2011. It is the sixth license acquired by Statoil in Indonesia this year. With this the total count of licenses for the company in the country reaches eight.
Statoil made its entry in Indonesia in 2007 when it was awarded the operatorship of the Karama as well as Kuma licenses. The latter was in partnership with ConocoPhillips (COP). Both licenses are situated in the Makassar Straits.
Subsequent to these, Statoil has made much progress in the country with three exploration licenses – Halmahera-Kofiau, North Makasar and West Papua IV – received in May. The company also won partnerships in two more exploration licenses – North Ganal in North Makassar Strait and Obi located in eastern Indonesia– in September.
Statoil has procured a large equity position in a promising frontier in Indonesia that holds immense potential for future exploration. We believe that the latest license award will boost the company’s growth prospects in Indonesia by adding to its already significant portfolio of frontier acreage in the country. Other major companies that have recently grabbed drilling rights in the country are BP Plc (BP) and Eni SpA (E).
Statoil holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. We maintain a Neutral rating on the company for the long term.
BP PLC (BP): Free Stock Analysis Report
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STATOIL ASA-ADR (STO): Free Stock Analysis Report
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