Norwegian major, Statoil ASA (STO) along with its partner ConocoPhillips (COP), has been awarded a deep-water exploration block in the Myanmar waters of Bay of Bengal.
Located 200 km from the coast, Block AD-10 spans over 9,000 sq. km and rests at a water depth of about 2,000 meters. Statoil, the operator of the license, has an equity share of 50% while the remaining 50% is held by ConocoPhillips.
Statoil will be required to carry out environment and social impact studies. It will also acquire 2D seismic during the initial 2.5-year study period. Subsequent to this, both Statoil and ConocoPhillips will decide on whether to enter into a three-year exploration period.
The aforementioned contract marks Statoil’s venture into a new country. Notably, the company already has operations in about 34 countries.
Moreover, the deal gives Statoil the opportunity to explore a largely untapped basin, which is considered to have petroleum as well as thick sedimentary deposits. The basin offers considerable upside and its exploration is in line with the company’s strategy.
Myanmar awarded 10 shallow water blocks and 10 deepwater blocks in an auction process that commenced in Apr 2013. Oil majors such as Royal Dutch Shell plc (RDS.A), Total SA (TOT), along with Statoil and ConocoPhillips, won exploration rights in offshore Myanmar.
As per the terms of the agreement, the recipient companies of deepwater blocks will be able to explore and operate the blocks on their own, while shallow water block recipients will be required to partner with a registered local player.
In recent times, Statoil has delivered strong exploration results, adding significantly to its resource base by making several high impact discoveries. The latest findings give the company access to new regions of Norway, Russia, Azerbaijan, Tanzania as well as Australia. These strengthen the company’s position and pave way for profitable long-term growth.
At present, Statoil has a Zacks Rank #4 (Sell).
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment