Statoil ASA is seeking to deepen its ties with OAO Rosneft even as sanctions hinder the Norwegian oil producer’s push to add resources from its eastern neighbor.
Statoil has started a process to secure rig capacity to drill two wells next year in the Sea of Okhotsk in Russia’s far-east and will over the winter months run test production at the North-Komsomolskoye heavy-oil field, said Lars Christian Bacher, executive vice president of the Stavanger-based company’s international development and production.
“We wish to develop our relationship with Rosneft further,” he said Tuesday in an interview at Statoil’s Fornebu office outside Oslo. “We need to do so within the framework set by the sanctions.”
Statoil and other producers such as Exxon Mobil Corp. and Royal Dutch Shell Plc are deepening their involvement in Russia and with partners there even amid an expanding set of sanctions imposed by the U.S. and Europe over the country’s role in the conflict in Ukraine. The restrictions put limits on western companies’ participation in Russian Arctic, deep-water and shale oil exploration and production.
Russia is still among the top five regions that Statoil expects will drive the growth in its international production over the next decade, alongside Tanzania, Brazil, Canada and the U.S., Bacher said.
Norway’s state-controlled producer has raised its international production seven-fold over the past decade, Bacher said. The share of production it gets from abroad was almost 40 percent in the second quarter compared to 16 percent on average in 2005, according to company reports.
As Statoil deepens cuts in spending and costs after oil prices fell by more than half in the last year, slowing the company’s long-term production growth compared to earlier targets, the proportion of international output will keep rising, Bacher said Tuesday.
“In terms of volume, growth comes from abroad,” he said. “In the really long perspective, the Norwegian shelf may one day close, while the rest of world will have more oil and gas.”
The pilot project in Siberia and the two offshore wells are part of a wider framework agreement signed with Rosneft in 2012. While these projects aren’t affected by current sanctions, the companies can’t cooperate on drilling in the Perseevsky license area in the Russian Barents Sea, located next to similar exploration areas in Norway inside the Arctic circle.
Exxon had to abandon exploration off the Kara Sea after making a billion-barrel find there with Rosneft last year.
The objective at North-Komsomolskoye, which holds about 600 million tons of oil, is to test whether production and recovery rates can make exploitation profitable, Bacher said. If tests are successful, the companies will drill more wells, he said.
Statoil hasn’t decided on how many rigs will be needed in Okhotsk.