Statoil ASA (STO), the Norwegian oil major, has decided to invest $1.4 billion in the Iraqi West Qurna Phase 2 oil field over the next four to five years and anticipates booking some reserves from the field.
Located in the Basra Governorate, Iraq, the huge West Qurna Phase 2 oil field holds approximately 12.8 billion barrels of proven crude oil reserves. Statoil and its Russian partner Lukoil owns 25% and 75%, respectively, in this oil field.
While Lukoil intends investments worth billions of dollars, Statoil would invest $1.4 billion over the first four to five years to increase its production quickly. During the second week of December 2009, the two companies won the bid for this field and agreed on a production plateau of 1.8 million barrels per day and a remuneration fee of $1.15 per barrel.
While Statoil is increasingly shifting its focus to the still unexplored areas of the Norwegian Sea and the Barents Sea, production growth from international operations is a key component for its overall annual upstream growth over the next few years.
In a separate transaction, Statoil and the Norwegian state-owned utility Statkraft ASA were awarded a contract to build Europe’s largest wind turbine park at Dogger Bank, off the UK coast. The construction includes 2,000 wind turbines at an estimated cost of NOK1.0 trillion ($0.176 trillion). Statoil’s extensive interests in infrastructure assets and growing investment strategy enable it to play a leading role in the European Energy market.
Read the full analyst report on “STO”
Zacks Investment Research
