European firms carve up North Sea oil assets

NORWAY’S Statoil sold stakes in North Sea oil fields to Austria’s OMV yesterday, in a $2.65bn (£1.69bn) deal giving the former cash to develop new projects and placing the latter on course to meet ambitious output targets.

The deal, which analysts said came at a comfortable premium, gives OMV a foothold in one of Norway’s biggest future oil developments and underlines a rebound in North Sea investments driven by a string of new oil field discoveries as well as high oil prices and better recovery technology.

“This is a very good price: it’s at two times book value while Statoil itself trades at 1.3 times book value,” said ABG oil sector analyst John Olaisen.

“OMV is a not a brand player but it’s very aggressive. It shows that Europeans are positive about the Norwegian Continental Shelf.”

Statoil sold minority stakes in the mature Gullfaks field, the brand new Gudrun development, Chevron’s Rosebank field in the UK and BP’s Schiehallion field. OMV will cover Statoil’s capital expenditure between 1 January and the closing of the deal, meaning it could be worth as much $3.15bn in total.

It also agreed optional cooperation in 11 of Statoil’s exploration licences in the Norwegian North Sea, West of Shetland and the Faroe Islands.

That cash – in addition to funds earmarked for projects it will no longer own – gives Statoil a sizeable budget to fund new projects, push on with new exploration and appease investors worried about soaring capital expenditure.

“The idea is to use the proceeds to reinvest in high-return projects,” Statoil chief executive Helge Lund said. “It will increase our financial flexibility in the sense it releases $7bn in future capital expenditure from these assets.”

Statoil needs to pay for the development of the giant Johan Sverdrup field in the North Sea, which it estimates could hold up to 3.3bn barrels of oil, as well as huge discoveries in Brazil, Tanzania and Norway, while simultaneously pushing ahead with an aggressive exploration portfolio.