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Statoil expanded its operations well beyond the Norwegian continental shelf to the Marcellus, Eagle Ford and Bakken shales in the U.S. as well as to hotspots offshore Tanzania and Brazil.
Statoil thinks unconventional resources will play an increasing role in world energy supply and the Norwegian company intends to be part of the journey, chief executive Helge Lund told reporters before making formal remarks at IHS CERAWeek on March 6.
In his keynote speech to delegates, he emphasized that in order for the industry to gain access to areas to drill, it needs to more effectively interact with society and gain more acceptance.
“When we say ‘license to operate,’ we mean securing the trust needed for governments to entrust us with the responsibility to extract natural resources, to the benefit of society at large. Trust is not something we can claim. Trust must be earned. And we must win it over and over again.
“When society expects more from us, we need to be -- and to be seen -- as ahead of the pack rather than lagging behind.”
Lund is enthusiastic about Statoil’s growth prospects. In North America, the company is active in the Marcellus and Eagle Ford shales through joint ventures, and in the Bakken by having acquired Brigham Exploration Co. last year. It also has a significant presence in the Gulf of Mexico deepwater.
“We are pleased with the position we have taken. We are in some of the most economically efficient assets. For us, North America is the biggest growth area we have outside of the Norwegian outer continental shelf,” Lund said.
The company was producing 100,000 barrels of oil per day (b/d) in North America at year-end 2011, but aims to grow that five-fold to 500,000 b/d by 2020.
Statoil has enjoyed “an unbelievable, interesting last 12 months,” Lund said. The company just unveiled a major discovery in its backyard, the North Sea, in an area that had been drilled since the 1960s. It also has two finds in the Barents Sea to open a new oil province. In addition, it is part of major discoveries announced offshore Tanzania and Brazil. The company produces 1.8 million b/d worldwide, but its goal is 2.5 million b/d by 2020.
Lund attributed the company’s recent drilling successes to better seismic, drilling and completion technologies, common themes among all speakers at CERAWeek.
Statoil’s growth goals rest on three legs: Norway, other offshore areas in the world, and unconventional resources in North America.
“We take the view that unconventional resources will play an increasing role. But the speech I’ll make this evening is about how the industry needs to reflect better on the challenges we face. People around us now expect more from the industry -- more dialogue, and a better way of dealing with the society around us, and showing that our activities benefit society.”
One thorny problem the industry faces is low natural gas prices, underscored by many speakers at CERAWeek. “So far, our gas volumes in the Marcellus are relatively small compared to the rest of the company’s production. In the short-term we will move more of our rigs into liquids areas. How else we react is being discussed internally.”
Lund said he is a strong believer in market forces, and therefore he thinks exports of liquefied natural gas (LNG) from the U.S. are coming. It may be easier to work on exporting stranded gas in the U.S. and Canada than from other areas in the world that are more remote.
Contact the author, Leslie Haines, at firstname.lastname@example.org.