Statoil's PDO Of Oseberg Vestflanken 2 Approved By Authorities

Statoil (OL:STL) ASA’s (NYSE:STO) Plan for Development and Operation (PDO) of Oseberg Vestflanken 2 has received the permission from the Norwegian Ministry of Petroleum and Energy. As estimated in 2015, the project requires an investment of about NOK 8.2 billion.

Two existing subsea wells will be reused by the Oseberg Vestflanken 2 development. These apart, an unmanned wellhead platform with ten well slots will be part of the project. All wells will be remote-controlled from the Oseberg field center.

The unique project is helping other operators, public authorities and the rest of Statoil’s project portfolio to learn about the high safety standards required for installations on the Norwegian continental shelf (NCS). The project is the first of its kind in Norway but has been extensively assessed on the Danish and Dutch continental shelves.

Statoil intends to lower investment costs throughout the engineering phase. To this end, the company has reduced the break-even price of the project by about 30%, supported by decreased capital expenditure and successful maturing of the resource base. This in turn has resulted in higher volumes. This makes the project strong despite a low oil price environment.

The new category J rig Askepott, which is currently under construction, will drill the wells at Oseberg Vestflanken 2. This new category is owned by the Oseberg license.

The aforesaid initiatives of Statoil are in sync with its aim of sustaining production in the NCS at the current level till 2030 and beyond. The endeavors of Statoil have been fruitful in extending the life of the Oseberg field.

Oseberg Vestflanken 2 is the first of the three planned phases for developing the remaining reserves in the Oseberg area. The area is estimated to hold reserves of about 110 million barrels of oil equivalent.

Currently, Statoil carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector include CVR Refining, LP (NYSE:CVRR) , PetroChina Co. Ltd. (NYSE:PTR) and ReneSola Ltd. (NYSE:SOL) . All these stocks sport a Zacks Rank #1 (Strong Buy).

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