Statoil: Realising value to further strengthen NCS portfolio

Statoil has farmed down in Aasta Hansteen, Asterix and Polarled and exited two assets on the NCS for a consideration of US$ 1.3 billion, including contingent payment.

Through this transaction Statoil has monetised on the Aasta Hansteen field development project, while retaining the operatorship and a 51% equity share. In addition the company has exited the non-core Vega and Gjøa fields. The transaction includes a farm down in four exploration licenses in the Vøring area. The buyer is Wintershall, a well-established player on the Norwegian Continental Shelf (NCS).

Asset development

"We realise significant value, created through successful asset development. The transaction increases our flexibility to further strengthen our portfolio," explained Arne Sigve Nylund, president for Development and Production Norway in Statoil.

The transaction consists of a cash consideration of US$ 1.25 billion and a US$ 50 million consideration contingent on Aasta Hansteen milestones. The accounting gain from the transaction is expected to be between US$ 0.7 – US$ 0.9 billion and will be adjusted for activity between the effective date 1 January 2014 and the closing date.

Capital expenditure

The transaction releases approximately US$ 1.8 billion of capital expenditure for the period from the effective date until end of 2020. Statoil's production from the divested Gjøa and Vega assets in H1 2014 is 22,000 barrels of oil equivalent per day. The transaction includes a transfer of operatorship of the sub-sea field Vega. The transaction will not involve transfer of personnel.

"We have a strong portfolio of projects. This transaction focuses our NCS portfolio and further improves our capacity to invest in core areas," added Nylund.

NCS investment

Statoil will invest approximately US$ 20 billion annually in the period 2014-2016. This includes NCS project Gudrun, which started up in April 2014, while Valemon will come on stream towards the end of year. In addition, projects like Aasta Hansteen and Gina Krogh are in the execution phase, while Johan Sverdrup and Johan Castberg are under planning. The exploration activity remains high with 50 exploration wells planned globally for 2014.

Statoil and Wintershall have signed an extended agreement to continue cooperating on EOR efforts and exploration.

Portfolio management

In recent years, Statoil has undertaken a series of transactions to position itself as a well-capitalised, technology focused upstream company. Active portfolio management continues to realise substantial value that is channeled to further strengthening the company's growth potential. Total proceeds of approximately US$ 20 billion have been realised through divestments by Statoil since 2010, including this transaction.

Recent portfolio optimisation activity includes divestments internationally as well as on the NCS. In 2013 Statoil divested their holdings in two West of Shetlands fields, Rosebank and Schiehallion. The same transaction also included shares in Gullfaks and Gudrun.

Adapted from press release by Katie Woodward

Read the article online at: https://www.oilfieldtechnology.com/exploration/12092014/statoil-strengthens-ncs-portfolio-1447/