Norwegian oil major Statoil ASA STO has entered into an agreement with Allseas to install three platform topsides on the Johan Sverdrup field. The share price has been trending upward post-announcement and has shown a 0.5% rise.
The installation of three platform topsides by the vessel is for the drilling, processing and living quarter platforms. The topsides will reach the field via Pioneering Spirit, which will install the topsides on the steel jackets.
The installation of the drilling platform topsides will take place in 2018, while the processing and living quarter topsides will be installed later in 2019.
The lifting capacity of the vessel is 48,000 tons. The vessel’s heaviest lift will be accomplished during installation of the processing platform topside, weighing about 26,000 tons.
The topsides after being assembled onshore will be transferred offshore for installation. This facilitates additional work associated to completion and testing of the topsides to be carried out onshore. This will reduce the number of offshore man-hours, thereby lowering both time and cost.
Pioneering Spirit, constructed in South Korea, is currently being completed in Rotterdam, the Netherlands. This contract award is subject to the approval of the Norwegian parliament’s plan for development and operation of the Johan Sverdrup field in 2015.
Statoil’s endeavors to improve recovery of resources in mature fields are commendable. The company has operations in all major hydrocarbon-producing regions of the world, with an emphasis on the Norwegian Continental Shelf (NCS). 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.
Statoil currently carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks from the oil and gas sector include Valero Energy Partners L.P. VLP, Sunoco LP SUN and Hallador Energy Co. HNRG. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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