Statoil ASA announced on Friday that the oil giant and partners have submitted a plan for the development of the giant North Sea oil field.
The oil company said in a statement it had sent a plan to the Norwegian Ministry of Petroleum and Energy, under which Statoil will operate around 40% of the field, while the rest is distributed among others.
The other companies have also issued similar statements, indicating that the partners could not agree on exact stake numbers. Therefore, the majority of the group have asked the government to interfere.
The company said that the field, which was found in 2010 and Statoil was appointed as working operator in early 2012, will be of great importance for Norway as it is projected to deliver around 25% of the countrys production by 2020s.
For the completion of phase one of the project, Statoil estimated that around $15.35 billion would be required.
The partnering companies plan to develop their operations in several phases, with the first including four bridge-linked platforms, in addition to three subsea water injection templates.
The $29-billion projected is expected to produce one of the worlds cheapest oil, with a break even point below $40 per barrel, making it very profitable even with the plunge in oil prices.
Statoil said it would rely on advanced technology in order to reach a recovery rate of 70% from the field, with production of around 315 000 to 380 000 barrels per day during phase one. Output is projected to start in late 2019, after the project receives the approval of Norways Parliament.
While, full production is estimated to range from 50 000 to 650 000 barrels of oil equivalent per day, representing around 40% of total oil output from the Norwegian continental shelf.
The company projected the field would supply between 1.7 billion and 3 billion barrels of oil during its lifetime, slightly boosting the upper end of its previous guidance.
The partnership has proposed Lundin Norway to get around 22% stake of the field, Petoro a 18% share, Det norske oljeselskap a 12% stake and Maersk Oil a 8% share.
“This is a great day. We are delivering the plan for development and operation for the largest oil discovery on the Norwegian continental shelf since the 1980s,” said Statoils Chief Executive Eldar Sætre.
Statoil gained 1.84% on Thursday and closed at NOK 143.60 in Oslo. On Friday the stock jumped 4.04% to NOK 149.40, marking a one-year decrease of 5.02%. The company is valued at NOK 457.89 billion.
According to the Financial Times, the 32 analysts offering 12-month price targets for Statoil have a median target of NOK 135.00, with a high estimate of NOK 226.94 and a low estimate of NOK 90.00. The median estimate represents a 5.99% decrease from the last closing price.
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