Share

Statoil takes $350m hit on exploration halt

Oslo - Norway's Statoil said on Friday it was halting exploration in Angola after poor drilling results, retreating from an offshore area it had high hopes for and capping a poor year for exploration.

Statoil said it was cancelling a three-year contract with Stena Drilling, handing back a drilling ship two years early and taking a $350m charge in the fourth quarter related to the contract, the drilling and the value of the Angolan blocks.

Statoil had high hopes for Angola's offshore pre-salt blocks 38 and 39 because the geology is similar to Brazil's, where major oil discoveries have been made in similar rocks.

"Statoil's first well results from the area have been disappointing and although the company still sees remaining prospectivity in the basin and on the Statoil acreage, more time is needed to evaluate the well results and mature new prospects before deciding on future activities," it said in a statement.

The firm still has commitments to participate in several more wells in Angola, but only as a partner and not an operator.

"This will add to an already bad quarter for them as oil prices have dropped from the third quarter," said Christian Yggeseth, an analysts at Arctic Securities.

"We might be facing another negative quarter, at least in the upstream international division."

Statoil is cutting capital expenditure and delaying or cancelling projects to save cash after a 10-year spending spree and a nearly 30% fall in crude prices since June.

It has already cancelled or suspended several rig contracts in 2014 - just a year after paying near record rates to secure drilling capacity - because costs have become too high and as it company ran out of prospects to drill.

Statoil, the most successful offshore explorer last year, has had a difficult 2014 with major exploration failures, including in the Norwegian Arctic and the Gulf of Mexico.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Voting Booth
Do you think corruption-accused National Assembly Speaker Nosiviwe Mapisa-Nqakula will survive a motion of no confidence against her?
Please select an option Oops! Something went wrong, please try again later.
Results
No, her days are numbered
42% - 385 votes
Yes, the ANC caucus will protect her
58% - 526 votes
Vote
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.0%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,016.25
+1.4%
Gold
2,220.77
+1.2%
Silver
24.87
+0.9%
Brent-ruolie
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE