Norwegian oil giant, Statoil ASA (STO) has received approval from the Norwegian Ministry of Climate and Environment to commence drilling operations related to the Apollo prospect in the Hoop area.
The Apollo prospect is among the three wells that Statoil intends to drill this summer in the Hoop area. The company is prohibited from drilling into oil-bearing layers till the ministry deals with the complaint from Greenpeace.
Statoil considers the safety of people and the environment as its first priority and does not want to undertake any activity that would jeopardize the lives of others. In the light of the aforementioned complaint, the company has discussed its exploration plans in the Barents Sea with Greenpeace. It has also informed the Greenpeace about the emergency response setup for operations and given it a chance to voice views and ask questions.
To keep the rig in position at all times, several activists are now hanging from ropes below the rig, above the open sea and above the thrusters. It is quite cold in the area with temperatures around zero degrees Celsius. These conditions put the lives of the demonstrators under great risk if they suffer a fall. Some activists could also drown due to the heavy equipment being carried.
An impact assessment has been carried out in the Hoop area and Norwegian authorities have opened the same for petroleum activity. Statoil has extensive plans for operations in the Hoop area, which is an area with a known geology, low pressure and temperature.
It is doubtful whether an oil spill would occur but in case it does, the company has placed numerous barriers to mitigate the situation.
Transocean Limited (RIG) owned rig, Transocean Spitsbergen, has been awarded a contract by Statoil for drilling in the Hoop area. Currently, the rig is about 300 kilometers offshore and negotiations between the crew on the rig and the activists are in full swing.
Statoil now has a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector include Encana Corporation (ECA) and Matrix Services Company (MTRX). Both these stocks sport a Zacks Rank #1 (Strong Buy).
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