Norwegian oil giant Statoil ASA (STO) has awarded the service contracts valued at about NOK 5 billion ($640.38 million) for seven bases in Norway over a period of 10 years.
These contracts, scheduled to become functional on Jul 1, 2015, have a term of six years with options for an extension of two years, twice. The contract duration shall be 10 years if all the options are exercised.
The contracts, which include terminal and warehouse services along with storage and pipeline handling, have been awarded to NorSea Group AS, Saga Fjordbase AS and AscoNorge AS.
NorSea Group AS has been given the contract for terminal and warehouse services in addition to storage and pipeline handling, at Dusavik in Rogaland, Kristiansund in Møre and Romsdal and Hammerfest in Finnmark. Moreover, the company has received terminal and warehouse services at Mongstad and Ågotnes in Hordaland and warehouse services besides storage and handling of pipelines in Florø in Sogn and Fjordane.
Saga Fjordbase AS has been awarded the contract for terminal services at Florø in Sogn and Fjordane, while AscoNorge AS has landed the contract for terminal and warehouse services, plus storage and pipeline handling, at Sandnessjøen in Nordland.
Logistics signify about 10% of its field costs and increasing the efficiency of the base operations is crucial for extending the lifetime of the fields that Statoil operates.
Statoil’s endeavors are said to improve recovery of resources in mature fields. The company operates in all major hydrocarbon-producing regions of the world, emphasising on the Norwegian Continental Shelf. We believe that Statoil is well positioned to sustain its steady production growth for the next few years on the back of its large resource base at NCS.
Currently, Statoil carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks include Enbridge Energy Management LLC (EEQ), Seadrill Partners LLC (SDLP) and QEP Midstream Partners, LP (QEPM), each sporting a Zacks Rank #1 (Strong Buy).
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