Norway-based major international integrated oil and gas company, Statoil ASA (STO), and China’s fourth largest oil company, Sinochem Group, signed a Memorandum of Understanding (MoU) to promote cooperation and experience among themselves for upstream activity in Brazil.
The MoU has been signed following the recent purchase of a 40% interest in the Peregrino oil field by Sinochem. Statoil holds the remaining 60% interest and is the operator of this field.
Located in offshore Brazil, the Peregrino oil field comes under the BM-C-7 block. The field is situated within 100 meters of water and holds an estimated reserves base of 300 to 600 million barrels of oil. The field is expected to come online in 2011.
Statoil has been investing more for oil. Lately, the company announced a plan to invest approximately $3.5 billion for increased oil production in Norway’s largest gas field, Troll. The company is increasingly shifting its focus to the still unexplored domestic areas. We believe these will enhance the company’s volume growth prospects going forward.
Moreover, production growth from international operations (presence in the emerging basins of the Caspian Sea and West Africa) is also a key component of Statoil’s overall annual upstream growth plans over the next few years.
We maintain our Neutral recommendation on Statoil ADRs as we are concerned about the higher drilling costs on the Norwegian Continental Shelf with tighter regulations following BP’s (BP) oil spill in the Gulf of Mexico.
The MoU has been signed following the recent purchase of a 40% interest in the Peregrino oil field by Sinochem. Statoil holds the remaining 60% interest and is the operator of this field.
Located in offshore Brazil, the Peregrino oil field comes under the BM-C-7 block. The field is situated within 100 meters of water and holds an estimated reserves base of 300 to 600 million barrels of oil. The field is expected to come online in 2011.
Statoil has been investing more for oil. Lately, the company announced a plan to invest approximately $3.5 billion for increased oil production in Norway’s largest gas field, Troll. The company is increasingly shifting its focus to the still unexplored domestic areas. We believe these will enhance the company’s volume growth prospects going forward.
Moreover, production growth from international operations (presence in the emerging basins of the Caspian Sea and West Africa) is also a key component of Statoil’s overall annual upstream growth plans over the next few years.
We maintain our Neutral recommendation on Statoil ADRs as we are concerned about the higher drilling costs on the Norwegian Continental Shelf with tighter regulations following BP’s (BP) oil spill in the Gulf of Mexico.
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