Statoil Plans Four Oil Wells in Russia Amid Sanctions

By Mikael Holter

(Bloomberg) — Statoil ASA plans to drill 4 wells in Russia with state oil firm OAO Rosneft, exhibiting Norway’s largest vitality producer is deepening its involvement within the nation towards the backdrop of worldwide sanctions.

Statoil plans to drill two wells at a heavy-oil pilot mission in western Siberia this 12 months and two offshore wells within the Sea of Okhotsk in 2016, mentioned spokesman Knut Rostad.

While Statoil believes the proposals lie outdoors the scope of sanctions, the plans are an instance of how western oil corporations are forging forward with initiatives even because the political environment exhibits little signal of bettering. The European Union and the U.S. are contemplating stronger measures towards Russia over its position within the Ukraine battle.

France’s Total SA has mentioned its $27 billion Yamal liquefied natural-gas mission is shifting forward, for instance. And whereas Exxon Mobil Corp.’s Arctic exploration enterprise with Rosneft was halted, the most important U.S. firm has added drilling rights in Russia. Exxon CEO Rex Tillerson is due in Russia on Wednesday to satisfy authorities officers.

Statoil’s initiatives want clearance from Norwegian authorities to verify they’re in compliance with sanctions, Rostad mentioned, declining to touch upon the standing of these approval processes.

“We are seeking all required approvals from relevant authorities to ensure that we remain in compliance with all sanctions,” he mentioned in an e-mail. “We won’t do anything without having the necessary approvals.”

Heavy Oil

Statoil, primarily based in Stavanger, has mentioned earlier than its heavy-oil mission at North Komsomolskoye in Siberia isn’t affected by sanctions. The subject will probably be examined additional subsequent 12 months to find out whether or not manufacturing is commercially viable, Rostad mentioned.

In the Sea of Okhotsk, exploration will probably be restricted to acreage that isn’t topic to sanctions on deepwater or Arctic drilling, Rostad mentioned.

The two wells deliberate right here will probably be on the Magadan-1 and the Lisyansky licenses, the place Statoil and Rosneft have an obligation to drill one nicely every by 2016 and 2017, respectively, he mentioned. The corporations plan to drill each subsequent 12 months to extend effectivity, Rostad mentioned.

All initiatives are a part of agreements signed between Statoil and Rosneft since 2012, which additionally embrace plans for exploration in Russia’s Barents Sea and for shale oil within the Samara area.

Deep Water

Sanctions placing restrictions on exploration for shale, Arctic and deep-water oil have already led to “some adjustments in our projects,” Statoil’s Rostad mentioned with out elaborating.

For all initiatives with Rosneft in Russia, Statoil wants to hunt approval from Norwegian authorities by a proper course of to make sure compliance with sanctions, Rostad mentioned. Norway, which isn’t a member of the EU, has aligned its sanctions with Brussels.

In some instances, the place Statoil and Rosneft have a three way partnership registered in an EU nation, approval have to be sought from that nation’s authorities as nicely, Rostad mentioned. He declined to say which international locations.

–With help from Joe Carroll in Chicago.