Statoil Caesar Tonga Comes Online - Analyst Blog
March 15 2012 - 9:15AM
Zacks
Norwegian energy company
Statoil ASA (STO) announced the commencement of
production from its Caesar Tonga deepwater project in the Gulf of
Mexico (GoM).
Caesar Tonga field, located in the
Green Canyon area of the deepwater GoM, is estimated to have a
reserve potential of 200–400 million barrels of oil equivalent
(MMBOE). The company, holding 23.55% working interest in the
project, expects the field production to reach about approximately
45,000 BOE per day from the first three subsea wells. A fourth
development well, which is part of the phase one development plan,
is expected to be drilled and completed later this year.
Anadarko Petroleum
Corporation (APC) holds an operational interest of 33.75%
in the project, and other associate partners include Shell
Offshore, a subsidiary of Royal Dutch Shell Plc
(RDS.A), and Chevron U.S.A., a subsidiary of Chevron
Corporation (CVX), with 22.45% and 20.25% stakes,
respectively.
The Caesar Tonga development venture
– that utilized Anadarko’s fully operated Constitution spar
floating production facility – also applied the steel lazy wave
riser technology for the first time in the GoM. The Constitution
spar, located in Green Canyon Block 680 in about 5,000 feet of
water, has a capacity of 70,000 barrels of oil per day and 200
million cubic feet of natural gas per day.
The Caesar Tonga development assumes
significance for Statoil as it demonstrates the company’s move to
significantly grow its production level in the GoM region over the
next several years. Statoil, the world’s largest offshore operator,
has operations in all major hydrocarbon-producing regions of the
world, but is mainly focused on the Norwegian Continental Shelf
(NCS).
We believe that the production
start-up at Caesar Tonga will help in driving the development and
expansion of Statoil’s international asset portfolio. Statoil is
also increasingly shifting its focus to the still-unexplored areas
of the Norwegian Sea and aims to achieve an equity production of
above 2.5 MMBOE in 2020.
However, we remain cautious about
the company’s weak production profile, which experienced a marginal
increment in the fourth quarter of 2011. In the reported quarter,
equity and entitlement production increased only by 2% and 1%,
respectively, from the year-earlier period. Hence, our long-term
Neutral recommendation remains unchanged and the company holds a
Zacks #3 Rank (short-term Hold rating).
ANADARKO PETROL (APC): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis Report
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report
STATOIL ASA-ADR (STO): Free Stock Analysis Report
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