Statoil Expects to Enter New Shale Plays in 2012
STAVANGER - Statoil ASA, the Norwegian oil giant, said Thursday it was looking to enter new shale plays as it eyes early moves in a nascent global "land grab" for shale oil and shale gas resources.
Statoil wouldn't say which countries it was currently exploring but presented an optimistic view on the role for shale oil and shale gas worldwide, amid a U.S. shale "revolution" that could significantly reduce the country's energy import needs. The shale boom could also affect other regions, Statoil said.
"There are many interesting countries," said Atle Rettedal, Statoil's senior vice president Global New Ventures, adding an announcement will be made "in the relatively near future," likely later this year.
"There is a global land-grab going on," Mr. Rettedal said during a press conference at the Offshore Northern Seas oil event in Stavanger, on the south-west coast of Norway.
Some countries might have shale resources "the size of the U.S., or even more," Mr. Rettedal said, adding that "the importance of shale shouldn't be underestimated" and it will likely "play a very important role in the supply of oil and gas in the decades to come."
In the U.S., shale gas is likely to account for 49% of total natural gas production by 2035, according to the Energy Information Administration, but globally the exploration of shale oil and shale gas resources is at a very early stage. At the end of 2011, Statoil said, the U.S. had drilled more than 32,500 shale gas wells, but Canada had only drilled 1,400, South America about 30, Australia 15, China about 60, and in all of Europe just 35 wells had been drilled.
Statoil is exploring shale resources in Australia's Northern Territories in a joint venture with Petrofrontier Corp., spending at least $25 million in the hope of finding shale oil, Mr. Rettedal said. The company is also entering the Stavropol shale play near the Caspian Sea, in cooperation with Russia's state-controlled giant OAO Rosneft.
"We'll likely move on to drill wells next year," said Mr. Rettedal.
Statoil has tried to enter Chinese shale plays, but has found the climate difficult since the Norwegian Nobel committee awarded the 2010 Peace Prize to Chinese dissident Liu Xiaobo.
"China potentially has a lot of shale [resources]. But we haven't been in position yet," said Mr. Rettedal. "The Nobel prize has had an effect on the Norway-China relationship."
Statoil has recently entered several U.S. shale plays. It became a partner in the Marcellus play in 2008, moved into Eagle Ford as an operator in 2010, and entered Bakken in 2011.
Statoil aims to produce a total 2.5 million barrels of oil equivalent per day in 2020, from 1.9 million barrels per day in 2010, and international production is a significant part of that. In the U.S., Statoil aims to increase its onshore and offshore production to 500,000 barrels per day from 100,000 barrels per day. Statoil's U.S. production is currently 60% shale gas and 40% shale oil.
Like other companies in U.S. shale plays, Statoil has been affected by lower natural-gas prices caused by the recent ramp-up in U.S. production.
"The development in gas prices has been negative for the last couple of years, but we believe it will turn," said Torstein Hole, Statoil's senior vice president U.S. onshore, in an interview.
Statoil's shale oil production is "quite competitive" against the rest of its portfolio," said Mr. Hole. "We have said that we have [a break-even cost of] about $50 and $60 a barrel for our Bakken production. With the current price level, that's good."
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