Statoil's Position in Production from East Azeri Field Strengthened

Oil&Gas Materials 19 February 2007 12:28 (UTC +04:00)

Statoil's portfolio has been strengthened with the Norne K-template, Gimle, Fram East, Oseberg West Flank and Ringhorne East, while the international upstream position has been strengthened with production from In Amenas in Algeria, Dalia in Angola and East Azeri in Azerbaijan, Trend reports citing an announcement provided by the company.

The CEO points to the field development plans for GjГёa and Alve as good examples of the group's efforts in further developing the NCS. During 2006, nine new fields came on stream.

The Statoil group had a net income of NOK 40.6 billion (USD6.5bn) in 2006, compared to NOK 30.7 billion in 2005.

Net income for the fourth quarter of 2006 was NOK 12.0 billion, compared to NOK 8.5 billion for the same period of 2005. The increase in net income of NOK 3.5 billion from the fourth quarter of 2005 to the fourth quarter of 2006 was mainly due to higher financial income and lower income taxes.

The annual income for 2006 is the best ever for Statoil. We maintain strong earnings and competitive returns despite temporarily lower production overall. Through the acquisition of two deepwater portfolios in the Gulf of Mexico (GoM) from Anadarko and Plains and the subsequent divestment of the retail operation in Ireland we have further upgraded our portfolio says Helge Lund, chief executive.

Both the fourth quarter and the year as a whole have been characterised by high exploration activity, both on the Norwegian continental shelf (NCS) and internationally. At the same time we have also secured new exploration acreage, put new fields on stream and launched new field development plans that support the group's long-term growth ambition, says Mr Lund.

On 18 December it was announced that the boards of directors of Statoil and Hydro recommend a merger of Hydro's oil- and gas activities with Statoil. The processes that lead up to the necessary approvals of the merger are well under way. By combining the strengths from both companies, we will build a strong Norwegian based energy company, well positioned to succeed even better in the global competition, says Mr Lund.

The group is operator for 24 oil and gas fields on the Norwegian continental shelf and accounts for 60% of all Norwegian petroleum production. As operator for 23 seabed facilities, STATOIL is a leader in subsea production. STATOIL has substantial industrial activity and operate about 2,000 service stations in the Scandinavian countries, Poland, the Baltic states, Russia and Ireland. STATOIL is one of the world's largest sellers of crude oil and a substantial supplier of natural gas to the European market.

Total oil and gas production in 2006 was 1,135,000 barrels of oil equivalent (boe) per day, compared to 1,169,000 boe per day in 2005. In the fourth quarter of 2006 total oil and gas production amounted to 1,153,000 boe per day, compared to 1,232,000 boe per day in the fourth quarter of 2005. STATOIL'S guiding on production for 2006 at 1,140,000 boe per day was based on an oil price of USD 60 per bbl. A realised oil price of USD 60 per bbl would have resulted in an estimated production of 1,139,000 boe per day. The difference from reported production is due to production sharing agreements (PSA) effects.

STATOIL was among the first foreign companies to establish operations in Azerbaijan in 1992. Today, Azerbaijan is one of STATOIL's international core business areas, and the company is one of the largest investors in the country. The company's current upstream interests include Azeri-Chirag-Gunashli (8.6 per cent), Shah Deniz (25.5 per cent), and Alov-Araz-Sharg (15.0 per cent).

STATOIL is the Operator for the Azerbaijan Gas Supply Company, responsible for gas sales to Azerbaijan, Georgia and Turkey. Statoil is also the Commercial Operator of the South Caucasus Pipeline Company where Statoil owns 25.5%. The company holds an 8.71% share in the BTC pipeline for export of Azerbaijani and Caspian oil from Azerbaijan, via Georgia to Turkey.