Statoil announces cost of divestment in Shah Deniz project and SCP

Photo: Statoil announces cost of divestment in Shah Deniz project and SCP / Oil&Gas

Baku, Azerbaijan, Dec. 17

By Aygun Badalova - Trend:

Norway's Statoil will receive a total cash consideration of 1.45 billion dollars as part of a 10-percent divestment in the Shah Deniz project and the South Caucasus Pipeline (SCP), the company reported on Dec.17.

Statoil on Tuesday signed an agreement to divest a 10-percent share of its 25.5-percent holdings in the Azerbaijani Shah Deniz field development project and the South Caucasus Pipeline. The buyers are the State Oil Company of Azerbaijan - SOCAR (6.7 percent) and BP (3.3 percent).

The effective date of the transaction is January 1, 2014.

The Shah Deniz co-investors are (after acquisitions): BP, operator (28.8 per cent), SOCAR (16.7 per cent), Statoil (15.5 per cent), Total (10 per cent), Lukoil (10 per cent), NICO (10 per cent) and TPAO (9 per cent).

President and CEO of Statoil, Helge Lund said the divestment corresponds with the company's strategy of portfolio optimization based on rigid prioritization of future investment, and capturing value created from a significant gas position.

The signing ceremony of the final investment decision on Shah Deniz-2 project was held in Baku today. Azerbaijani President Ilham Aliyev, his spouse Mehriban Aliyeva, the heads of several countries and governments attend the event.

The contract to develop the offshore Shah Deniz field was signed on June 4, 1996. Shah Deniz reserves are estimated at 1.2 trillion cubic meters of gas. Within the second phase of development it is planned to produce some 16 billion cubic meters of gas, six billion of which will be transported to Turkey and ten billion to Europe.

According to the report of Statoil, the total cost of the Shah Deniz-2 and SCP Expansion projects will be around 28 billion dollars.

Statoil holds a 20 percent share in TAP AG, the owner of Trans Adriatic Pipeline (TAP), which is developing the pipeline for gas transport from Turkey to southern Europe. Statoil will not participate as an investor in TANAP.

The current Statoil equity production (gas and condensate) from Shah Deniz in the third quarter of 2013 is 56,000 barrels of oil equivalent per day.

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Tags: Statoil