Norwegian oil analysts claimed that oil prices will need to rise to USD 70-80 a barrel, up from less than USD 45 at present, in order for Statoil to profit on its surprise decision to spend NOK 21 billion on oil fields off Brazil.
Statoil, which reported a second-quarter loss last week, bought Brazilian oil company Petrobras’ stakes in the Santos fields off the Brazilian coast. Statoil wouldn’t project how much it will need per barrel to make its investment profitable. Rystad Energy of Oslo, however, claimed that Statoil will need oil prices of USD 80 a barrel to log profits. If production hits 1.3 billion barrels, break-even would be around USD 70 a barrel.
Tim Dodson, Statoil’s head of exploration, was undaunted and Rystad Energy itself estimated that oil prices will rise by the time the Brazilian oil fields are producing. Dodson claimed Statoil was “strategically smart” to buy into the fields when oil prices are relatively low.