Statoil Unlikely to Develop Snoehvit Oil



OSLO JAN 10 2006 (Dow Jones Commodities News via Comtex)

Statoil ASA (STO) is unlikely to develop the oil resources at its Snoehvit field in the Barents Sea, despite prospects being raised by the nearby Goliat oil discovery, an executive at one companies involved in the license said Tuesday.

Statoil officials say they haven't yet determined whether the project can go ahead, but said such an undertaking may be hampered by shortage of drilling rigs and an expected reduction in the pressure needed for oil extraction.

Statoil said earlier this month that Eni SpA's (E) second oil discovery on the nearby Goliat field - bringing estimated reserves there to 100 million barrels - had revived Snoehvit's prospects.

Currently, Statoil plans to develop Snoehvit's 200 billion cubic meters of natural gas and over 100 million barrels of condensate, or light oil, but hasn't decided on the crude oil there.

"We need to see if Goliat could be the trigger for us to develop Snoehvit's thin oil zone," spokesman Sverre Kojedal said Tuesday.

While higher prices make such a project more attractive, Statoil estimated that only half of the approximate 500 million barrels of oil estimated to lie in the Snoehvit field would be accessible, Kojedal added.

Statoil spokesman Kristofer Hetland said oil extraction would be further limited because gas production will begin first - reducing pressure necessary in the reservoir for crude extraction. He said actual recovery could be limited to around 25 million to 50 million barrels.

Hetland said the current tight drilling rig market would also be a hindrance.

"We have a very demanding market right now, and we would have to drill several more test wells to verify crude volumes," Hetland said.

Statoil, as Snoehvit's operator, owns a 33.53% stake. Other owners include Total SA (TOT) with 18.4%, Gaz de France (1020848.FR) with 12%, Amerada Hess (AHC) with 3.26% and RWE Dea, a unit of RWE AG (RWE.XE), with 2.81% and state-owned Petoro with 30%.

Copyright (c) 2006 Dow Jones & Company, Inc.

RELATED COMPANIES
Company: Statoil more info
Operates 1 Offshore Rigs
 - Statoil May Build Onshore Terminal for Castberg Oil -Minister (Jan 16)
 - Canadian Offshore Oil Interest Grows As Pipeline Woes Sink Alberta Prices (Dec 20)
 - Sharp Fall In Applications For Norway's Arctic Oil Permits (Dec 05)
Company: Total S.A. more info
 - Total Starts Up Antwerp Refinery And Petrochem Complex After Upgrade (Nov 30)
 - Hoegh LNG: Pakistan LNG Import Project Consortium Folds (Nov 16)
 - France's Total Buys Engie's LNG Business For $1.5B (Nov 08)
Company: Hess Corporation more info
Operates 4 Offshore Rigs
 - Hess Cutting Hundreds of Workers As It Battles Activist Investor (Jan 16)
 - ExxonMobil Reports More Offshore Guyana Success (Jan 05)
 - About 75,000 Bpd Of Gulf Oil Output Still Shut After Shell Fire (Nov 15)
Company: Gaz de France more info
 - Grenland Group Delivers Gjoa Subsea Structures (Sep 01)
 - Plexus to Supply Wellhead Systems for Mediterranean E&P Activities (Jul 20)
 - ELNG Completes First Ever Health & Safety Partnership Program with GE O&G (Jul 15)
Company: Petoro more info
 - Aker Solutions Secures Johan Sverdrup Phase 2 FEED Contract (Mar 21)
 - NPD Grants Consent for the Expansion of Nyhamna Gas Plant (Feb 10)
 - Statoil Granted North Sea Drilling Permit by NPD (Dec 21)
Company: RWE-DEA more info
 - Sharp Fall In Applications For Norway's Arctic Oil Permits (Dec 05)
 - Lundin Granted Drilling Permit in PL609 (Sep 10)
 - Lundin Spuds Appraisal Well on Alta Discovery (Mar 25)
For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit www.riglogix.com.