Hess to Fix Valhall Audit Issues - Analyst Blog
January 14 2014 - 1:50PM
Zacks
U.S. independent Hess
Corporation (HES) has decided to immediately rectify all
problems pointed out by a safety audit of its work on the Valhall
field, off Norway.
As a partner in the BP plc (BP) operated field,
the company is taking action following the audit by Norway’s
Petroleum Safety Authority (PSA) that recognized alleged weakness
in its management.
The audit by the PSA revealed regulatory violation related to Hess’
management and documentation systems, as well as handling of risks.
Hess has received an order from the agency with a deadline of May 1
for the implementation of actions necessary to improve its
performance.
In response to this order from PSA, Hess issued a statement that it
is working closely with the former to ensure that the shortcomings
are fixed and complied with the PSA’s timeline. The company has
also agreed to meet Norwegian regulations.
Hess is executing a transition from an integrated oil and gas
company to a predominantly E&P entity, thereby shifting its
growth approach from high-impact exploration to lower-risk
unconventionals and a smaller, more focused exploration
portfolio.
It is expected that unconventional oil (including sources like oil
shales or coal-based liquid supplies) and gas extraction (using
non-traditional techniques) will play important roles in the world
energy mix in the long run. After building up position in the North
American Bakken oil field for unconventional oil, Hess is pursuing
unconventional gas in the Marcellus Shale play. Hess’ smaller
exposure to Eagle Ford and Utica Shale as well as several global
development projects (such as Ghana, Brunei, North Sea, Gulf of
Mexico, Southeast Asia and Kurdistan) are likely to be the growth
drivers.
Hess carries a Zacks Rank #3 (Hold). Some better-ranked stocks in
the oil and gas sector include Cheniere Energy Partners
L.P. (CQP) and CNOOC Ltd. (CEO). Both
stocks hold a Zacks Rank #1 (Strong Buy).
BP PLC (BP): Free Stock Analysis Report
CNOOC LTD ADR (CEO): Free Stock Analysis Report
CHENIERE ENERGY (CQP): Get Free Report
HESS CORP (HES): Free Stock Analysis Report
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