Norway-based major international integrated oil and gas company, Statoil ASA (STO) has returned three out of its four Greenland offshore oil and gas exploration licenses due the relentless fall in oil prices. Crude prices have fallen in excess of $60 since June to near $45 levels.
The company had earlier announced that it would cut back on its Arctic exploration efforts, one of its priority areas, to control capital spending.
Statoil has Arctic licenses from Greenland to Russia. Three licenses off the west coast of Greenland were handed back in 2014, but the company kept one license off the island's east coast where the deadline for drilling is longer.
Statoil is one of the world's biggest sellers of crude oil and a major supplier of natural gas in the European market with substantial industrial operations. The group has service stations in the Scandinavian countries, Ireland, Poland, the Baltic states and Russia.
We commend Statoil’s endeavors to improve recovery of resources in mature fields. 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.
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 in Norway, Russia, Azerbaijan, Tanzania and Australia, paving way for long-term growth.
Statoil aims to achieve an equity production of above 2.5 million barrels of oil equivalent in 2020. This 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 #5 (Strong Sell). Better-ranked stocks include Spectra Energy Partners, LP (SEP), Seadrill Partners LLC (SDLP) and GeoPark Limited (GPRK) all of which sport a Zacks Rank #1 (Strong Buy).
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