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Friday, February 23, 2024

Questions rise over big oil deal

Statoil’s huge oil exploration deal with Russian firm Rosneft in the Arctic may not be as promising as initially thought, suggests a Norwegian researcher who’s closely studied energy prospects in the Barents Sea. He thinks Italian oil firm Eni and Exxon of the US were granted more favourable exploration areas than Statoil.

Statoil chief executive Helge Lund has conceded that his deal with the Russians carries high risk, but he thinks the rewards can be high, too. PHOTO: Statoil/Harald Pettersen

“I’m amazed,” Arild Moe, assistant director of the research foundation Fridtjof Nansens Institutt in Bærum told newspaper Dagens Næringsliv (DN). “This is a surprising agreement. Compared to Eni’s agreement, Statoil’s blocks are much more uncertain.”

Moe has published several articles on Russian energy policies and development in the Arctic. He told DN that he thinks Eni won access to the “most interesting” areas in what earlier was disputed territory in the Barents Sea.

Statoil’s exploration areas outlined in its deal with Rosneft lie in “immature” areas far from land and far to the north, “an area we don’t know much about,” Moe said.

He said he’s surprised, because Rosneft earlier expressed a desire to work with Statoil based on the Norwegian company’s offshore expertise. “But it’s the Italians whom the Russians will work with in the largest portion of the Barents Sea,” Moe told DN.

He noted that Eni has worked with Rosneft earlier, also has solid offshore experience in areas known for rough weather and will be operator on the Goliat field in the Barents. “But I’m still surprised,” Moe told DN.

He believes Statoil’s huge investment in the agreement signed with the Russians over the weekend is risky for several reasons, not least regarding its fundamental rights tied to oil extraction in Russian territory.

“Russian law only allows Russian companies, in which the state is the major owner and which meet various other requirements, to get offshore licenses,” Moe said. “A joint venture company that Statoil and Rosneft will establish won’t be able to own licenses. I think that will probably fall into place over time, but it shows the uncertainty in the framework of the deal that must be clarified.”

A Statoil spokesman said it was correct that only Russian companies can be the operator on Russian fields. “But Rosneft has secured the opportunity to take in international partners like Exxon-Mobil, Eni and Statoil,” he said. “The cooperation will be organized through joint venture companies. Development will take place through the joint venture companies.”

Norwegian environmental protection authorities, meanwhile, are already demanding vastly improved preparedness for “acute cases of pollution” before any permission is granted for major oil exploration in the Barents Sea. Norway’s Oil & Energy Ministry plans to open 86 exploration blocks in the northernmost areas of the Barents in its 22nd concession round.

Views and News from Norway/Nina Berglund

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