Statoil To Hold Back US Shale Ramp Up
STAVANGER, Norway, Aug 25 (Reuters) - Norwegian energy firm Statoil will only slightly raise its U.S. shale oil and gas output in the near term due to spending curbs, well below a potential for a 50 percent surge, the firm said on Monday.
Statoil, which produces around a tenth of its oil and gas from its U.S. shale operations in the Bakken, Eagle Ford and Marcellus formations, has even cut back investments in the area, as shale projects are competing for capital within the company, said Torstein Hole, Statoil's chief for U.S. onshore activities.
Statoil abandoned its 2020 production target earlier this year and cut its capital spending budget, arguing that it needs to save cash and return more to shareholders after a decade of ramping up spending.
The firm increased shale production to around 210,000 barrels of oil equivalent per day by the middle of 2014 from close to nothing in 2010, but output levelled off in the second quarter.
When asked if output would stay broadly unchanged for the rest of the year, Hole said during an oil and gas conference in Stavanger, west Norway: "I expect it (U.S. shale production) to be approximately the same.
"It will increase somewhat, but it will not be a significant increase. It (growth rate) will not be back to the levels we've seen in the past."
"We could easily, with the portfolio we have now, increase it to 300,000 per day. But we have the priority toward profitability."
"We have to compete for capital within the company and the pace of development will depend on how successful we are in delivering high profitability," Hole said.
Statoil earlier targeted daily production of 500,000 barrels per day from U.S. operations by 2020, including 300,000 barrels per day from shale, but also gave up that target when it revised broader projections.
(Reporting by Balazs Koranyi; editing by Alister Doyle)
in Stavanger, Norway
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Big Oil Reuses Platforms in Latest Cost-Cutting Trick (Nov 15)
- Tight Oil, Shale to Drive Majors' Output to New Highs (Oct 16)
- Shell, Equinor Commit to Tanzania LNG as They Await Host Accord (Oct 16)