Norwegian oil giant Statoil ASA’s (STO) first well off Norway in partnership with OAO Rosneft, the Russian state-run oil company that is subject to international sanctions, will now likely be deferred. This is because a complaint by Greenpeace claims that the arctic well is an oil-spill hazard.
Per the statement by company, drilling on the Statoil-operated Pingvin prospect in the Barents Sea cannot commence until the appeal has been looked into by the Norwegian Environment Agency this week.
According to the Norwegian unit head of Greenpeace, the field’s proximity to vulnerable resources such as Bear Island and the ice edge makes the drilling of the well highly risky. However, the impact of Greenpeace’s complaint on Pingvin well’s operation is still uncertain. This appeal is the fifth one filed by Greenpeace against Statoil’s drilling in the Barents Sea.
The latest complaint comes in the wake up sanctions on Rosneft, which owns a 20% stake in license 713 where Pingvin is located, due to Russia’s involvement in the conflict in eastern Ukraine. Due to this, the timing of some of Statoil’s projects with Rosneft in Russia, regarding onshore and offshore exploration have been adversely affected.
Drilling of the top hole in the concerned well has been completed. However, the deeper layers cannot be drilled without dealing with Greenpeace’s complaint. As per the Norwegian Environment Agency, drilling is intended to begin by mid-September at the earliest.
Statoil, the operator of license 713, has a stake of 40%. The other partners are Rosneft, North Energy ASA and Edison International, each holding 20% interest.
Currently, Statoil carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Cameron International Corporation (CAM), Valero Energy Partners LP (VLP) and Sunoco Logistics Partners L.P (SXL). All of these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
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