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Wednesday, April 24, 2024

Statoil expands amidst controversy

Norwegian oil company Statoil is barreling ahead with major expansion plans for its oil and gas production, despite ongoing complaints from the country’s environmental lobby. While one activist accused Statoil of spreading its “dirty business” all over the world, company management was greasing the skids for growth.

Statoil still sees growth potential off Norway, as well as abroad. PHOTO: Harald Pettersen/Statoil

Lars Haltbrekken, head of Friends of the Earth Norway (Naturvernforbundet), joined other environmental activists in slamming Statoil on Tuesday over its shale gas operations in the US. They quickly embraced the concerns of a group of Pennsylvania residents worried that shale gas drilling is threatening or already has contaminated drinking water supplies throughout the region where Statoil is active.

Haltbrekken accused Statoil of upsetting indigenous groups and now the people of Pennsylvania with its oil and gas extraction methods. He and another environmental leader in Norway, Arild Hermstad of Framtiden i våre hender, want Statoil to withdraw from its involvement in the Alberta oil sands project and now from shale gas drilling as well.

Statoil officials seem to be taking the latest controversy in stride and far from pulling out, they plan to boost exploration and extraction activity. In a detailed announcement aimed at investors and analysts this week, Statoil unveiled ambitious long-term growth strategies both on what they called Norway’s “revitalized” continental shelf and abroad.

Boosting production off Norway…
The company intends to increase production from around 1.9 million barrels of oil equivalents per day to more than 2.5 million barrels by 2020. Statoil will be able to do that, according to chief executive Helge Lund, because of its “world class project portfolio” and its “premium positions” on Norway’s continental shelf.

Production off Norway alone is expected to yield more than 1.4 million barrels of oil and oil equivalents per day (boe) by 2020. Statoil’s projects outside Norway will yield more than 1.1 million boe.

Despite ongoing concerns that Norway’s offshore oil and gas fields will some day run dry, Lund claimed they have “significant potential” and continue “to yield long-term, superior value creation opportunities in an investment friendly environment.” Noting new, promising discoveries like Skrugard in the Barents Sea, Lund said the Norwegian continental shelf “remains a very attractive and globally competitive province for future oil and gas activities.”

…and overseas
Statoil also pointed to growth potential where it’s active in the Gulf of Mexico, the Caspian region, the Arctic, Anglola and not least off Brazil, where it could announce new discoveries around the Peregrino South well adjacent to the newly opened Peregrino offshore field. Peregrino South could yield between 150 million and 300 million barrels.

Lund also noted rising demand for gas, not least because of concerns over and closures of nuclear power plants. He said Statoil’s North American operations will focus on building the now-controversial Marcellus position in the east and Eagle Ford in Texas, “taking on operatorship and growing into new areas.”

Views and News from Norway/Nina Berglund
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