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Equinor Scraps Decommissioning Plan at Statfjord Oilfield

Zacks Equity Research

Equinor ASA EQNR recently announced its plans to ramp up productivity from its Statfjord oilfield comprising Statfjord A, B and C production platforms. Statfjord A, scheduled for decommissioning in 2022, is now extended to 2027 while that of Statfjord B and C platforms are deferred beyond 2035.

About the Statfjord Oilfield

Statfjord, discovered by ExxonMobil XOM in 1974, is a world-class oil and gas field located 580 square kilometers in the Norwegian boundary of the North Sea in the UK at a water depth of 145 meters. In September 2019, ExxonMobil sold all its Norwegian assets worth $4.5 billion to Var Energi.

Statfjord boasts an amazing history of producing more than 5 billion barrels of oil equivalent since it came online in 1979. Crude oil production hit an all-time high in 1992 at 640,000 barrels per day (bpd). However, in recent years, the output saw a downturn. Over the initial 10 months of 2019, production was recorded at just 40,000 bpd.

Therefore, in order to expand its production scale, this Norway-based company cancelled its plans to decommission Statfjord and extended the oilfield’s life after extensive mapping of the underground.

Equinor ASA Price

Equinor ASA Price

Equinor ASA price | Equinor ASA Quote

 

Plan in Detail

Per Equinor’s latest plan, 100 new wells will be drilled at Statfjord by 2030 and its production will be prolonged by maturing new reserves for recovery and making essential advancement of the platforms, thereby strongly boosting field activity.

With newly-formulated designs and extensions, Equinor is creating a new “late life” wherein it will find innovative ways to improve operations with low carbon emissions from late-life fields. For the next five years, Equinor plans to cut down on carbon emissions by 50% for each produced barrel owing to an anticipated increase in production by almost 43%. Evidently, it plans to trim carbon footprint in the Norwegian offshore industry by 40% through 2030, 70% by 2040 and almost non-existent by 2050.

While Equinor is the chief operator of the Statfjord oilfield with 44.3% working interest, Norwegian-independent Var Energi, subsidiary of Eni SpA E, owns 21.4% stake. Also, Centrica PLC’s CPYYY unit Spirit Energy holds 19.8% and the rest is retained by some non-Norwegian entities.

This Zacks Rank #3 (Hold) Equinor’s endeavors to improve recovery of resources in mature fields are commendable. The company has operations across all major hydrocarbon-producing regions of the world with key emphasis on the Norwegian Continental Shelf (NCS).

We believe that the company is well positioned to sustain its steady production growth over the next few years on the back of its large resource base at NCS. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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