Norwegian energy firm Statoil ASA (STO) announced the sale of its 15.5% stake in the Shah Deniz field located on the deep water shelf of the Caspian Sea. The Shah Deniz field is operated by BP plc (BP) with a 28.8% stake. In the second quarter of 2014, Statoil 's production from the Shah Deniz field was 38,000 barrels of oil equivalent per day.
Stataoil also divested its 15.5% share in the South Caucasus Pipeline Company or SCPC, 15.5% share in the SCPC holding company, and 12.4% share in the Azerbaijan Gas Supply Company or AGSC. Divestment of all the aforementioned assets to the Malaysian oil and gas company PETRONAS optimizes Stataoil’s asset portfolio and strengthens its financial flexibility through the infusion of $2.25 billion. The transaction is expected to be closed in early 2015.
The divestment was in line with the company’s strategy to strengthen its resource base and prioritize high-potential developments.
Statoil is an integrated oil and gas company. One of the world's biggest sellers of crude oil, Statoil is also a major supplier of natural gas in the European market and has substantial industrial operations. The group has service stations in the Scandinavian countries, Ireland, Poland, the Baltic states and Russia.
In recent times, Statoil has delivered strong exploration results, adding significantly to its resource base by making several high impact discoveries. The latest finds give the company access to new regions of Norway, Russia, Azerbaijan, Tanzania as well as Australia, paving the way for long-term growth.
Statoil aims to achieve an equity production of above 2.5 million barrels of oil equivalent in 2020. The growth is expected to come from new projects from 2014 to 2016 that would result in a compound annual growth rate of 2% to 3% for the period 2012 to 2016. The second stream of projects is expected within the 2016−2020 period that would likely lead to a CAGR of 3% to 4%.
Statoil currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Helix Energy Solutions Group Inc. (HLX) and Newpark Resources Inc. (NR). Both these stocks sport a Zacks Rank #1 (Strong Buy).
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