Several Upcoming Projects to Support Production Growth

Wednesday 8 February 2012, Amsterdam

Several Upcoming Projects to Support Production Growth

Statoil’s crude oil and natural gas production showed an increasing trend during 2006–2009, before declining in 2010. The company’s production increased at a Compound Annual Growth Rate (CAGR) of around 1.4% during 2007–2009 before declining by nearly 4.7%, from 634.0 MMboe in 2009 to 604.5 MMboe in 2010. Furthermore, the company expects production to remain at the same level or decline slightly in 2011. However, the company is dependent on its upcoming projects portfolio to drive production growth beyond 2011. The company has a huge inventory of upcoming assets which are expected to come online during 2011–2020, and the company has already sanctioned 29 start ups which are expected to come online during 2011–2016. Some of these projects are Caesar/Tonga, Hibernia South Extension, Marulk, Ormen Lange Mid-North Development, Pazflor, Peregrino, Big Foot, Corrib, CLOV and Goliat. These projects are diversified both in terms of geography and resource base. Some of the projects of the company, such as Alfa Sentral, Eirin, Svalin, Luva, and West Qurna II are in the pre-sanction phase. The company expects these start ups, including both sanction and pre sanction, to add nearly 1,500kboe/d of new capacity during 2011–2016. These projects are expected to make a significant contribution in the total production of the company in the future, thereby supporting long term growth of Statoil.

Norway

Statoil derives its production primarily from Norwegian assets. Norway’s contribution in the company’s total production has averaged nearly 81.4% during 2006–2010. However, production in Norway has shown a declining trend since 2008, and the company plans to stabilize production from its Norwegian assets through several upcoming projects. These projects include Skarv, Marulk, Svalin, Goliat, Valemon and Gudrun, with a total capacity of 245kboe/d. The company has also planned several fast track projects in order to develop small fields in NCS. Some of these fast track projects are Peon, Draupne, Dagny, Luva and Ormen Lange, which are expected to come online after 2016. The company plans to add around 700kboed of new capacity through the upcoming projects in Norway until 2020. According to GlobalData estimates, the production from the Norwegian upcoming assets portfolio is expected to increase from 484.3 MMboe in 2010 to 493.6 MMboe in 2015. The figure below shows the total production of the company from the upcoming assets in Norway during 2011–2015.

See figure: Statoil ASA, Production Forecast, Norway, MMboe, 2011–2015

 
Outside Norway

The international portfolio of the company includes assets located in various regions such as the Middle East, North Africa, Europe, Asia, South America, Sub-saharan Africa and North America. The contribution of these regions in the company’s total production has averaged around 18.6% during 2006–2010. The company develops its portfolio of upcoming projects in the North American region through its DPNA business area. The primary strategy of DPNA is to develop several upcoming assets with a diversified resource base, including deep water, gas value chains and heavy oil. The major projects of the company that are expected to come online in this region during 2011–2014 are Caesar/Tonga, Hibernia South Extension, Big Foot, Jack, St Malo, and Tahiti Phase 2. The company also plans to further develop its shale resources such as Marcellus, EagleFord and Bakken within the next two to three years.

Furthermore, the company develops its portfolio of projects in other regions, excluding Norway and North America, through its DPI business area. The company expects the contribution of the international portfolio to increase in the coming years, primarily through several upcoming projects. These projects include Peregrino in Brazil, In Salah and In Amenas in Algeria, ACG and Shah Deniz in Azerbaijan, and blocks 15, 17 and 31 and Agbami in Nigeria.

According to the GlobalData estimates, the production from the assets outside Norway is expected to increase from 120.2 MMboe in 2010 to 197.0 MMboe in 2015. The figure below shows the total production of the company from the assets in regions outside Norway during 2011–2015.  

They expect the company’s total production to increase at a CAGR of 3.5% during 2011–2015, as Statoil have several development and exploration projects lined up for the future. Additionally, the projects are geographically diversified, and span across all resource types. This indicates a balanced and strong portfolio of upcoming projects for the company.