Statoil deals allow Chevron to return to Norway

In a move to strengthen its overseas portfolio, Norway's Den norske stats oljeselskap AS (Statoil) has arranged to swap interests in exploration and production licenses off Norway and the U.K.

Statoil concluded exchange and/or sales deals with Chevron U.K. Ltd., BP Exploration Operating Co. Ltd., Texaco Britain Ltd., Norsk Hydro AS, Elf Petroleum Norge AS, and Total Norge AS.

The exchange will see Chevron return to the Norwegian continental shelf for the first time since 1989.

In another move, Elf and Norsk Hydro have also agreed to exchange some Norwegian offshore assets.

Statoil's tidying up of its Norwegian portfolio has been code-named Rubicon, and involves 21 licenses and assets valued at a total of 5-6 billion kroner ($770-930 million).

Who got what

Chevron acquired a 7.56% stake in Draugen field off mid-Norway, plus 30% interest and operatorship of Block 6406/12, as well as shares of 15-20% in Blocks 6406/11, 6407/8, 6407/11, 6407/12, 7219/7, and 7219/8.

In return, Chevron gave Statoil a 12% interest in Alba oil field on Block 16/26 in the U.K. North Sea. Here Chevron retains 21.17% and operatorship.

Bob Connon, managing director of Chevron Europe, said: "The Norwegian shelf contains some of the most attractive exploration potential for oil and gas in the world.

"This transaction gives Chevron an excellent starting position in the region, with cash flow from production, good exploration prospects, and an operatorship in one license."

BP will take over Statoil's 12.5% and 20% interest in Ula and Gyda oil fields off Norway, respectively, both of which are BP-operated. BP will also take 7.56% out of Statoil's interest in Draugen.

In return, Statoil will receive BP's 16.9% interest in Jupiter gas fields in the U.K. North Sea; 3.9% in Block 15/5 Glitne discovery off Norway; and BP's interests in Kvitebjorn gas find and Blocks 33/12, 35/6, and 36/4.

Statoil said agreements with Norsk Hydro, Elf, and Total involve purchase and sale of holdings in licenses off Norway, including transfer of an operatorship. Details of these swaps were not released.

Rubicon's effects

Statoil said the Rubicon exchanges will reduce its Norwegian oil production short term by 40,000 b/d, but boost overseas output by 20,000 b/d of oil equivalent.

Oil reserves will be reduced slightly, but gas reserves increased by 20 billion cu m.

Stig Bergseth, Statoil executive vice president, said, "These transactions contribute significantly to our stated goals of building further strength in our core areas off Norway and in selected international business-build areas."

Besides the Rubicon asset exchange, Statoil U.K. also agreed to a swap of U.K. assets: 10% in Block 30/2c and 0.375% in Block 21/14a in return for 8% in Block 3/28a from Texaco.

The deal will increase Texaco's interest in Jade discovery, which is being considered for development.

Statoil will add to its existing 20% interest in Bressay heavy oil find, also being considered for development.