Norway’s Statoil has reduced its exploration ambitions for 2017 and will drill about 30 wells, down from previous plans for as many as 35, its CFO said on July 27.
The company has revised its exploration spending guidance for 2017 to $1.3 billion from $1.5 billion, citing “strict prioritization and efficient drilling operations” in a statement accompanying its second-quarter earnings.
Its exploration spending in the second quarter was down to $224 million from $423 million during the same quarter a year ago.
“We started from 30 to 35 [exploration] wells, and now we are more specific on the number of wells,” CFO Hans Jakob Hegge said during a second-quarter results call with analysts.
He declined to elaborate on which wells Statoil will not drill but said the company was still a more active explorer than its peers “in relative terms.”
The oil company scaled down exploration to save money to pay dividends and debts after oil prices crashed in 2014.
Statoil reported adjusted operating profit of $3.02 billion in the second quarter, against expectations of $2.97 billion and against $913 million during the same period a year ago.
“Higher prices for both oil and gas, solid operational performance with high production, a reversal of provisions in Angola of $0.754 billion and continued progress on improvement work contributed to the increase,” the majority state-owned company said in a statement.
Statoil completed 23 exploration wells in 2016, and so far this year it has drilled 14 wells, making nine finds, including a small oil discovery in the Barents Sea. Another well drilled in the Barents Sea, Blaamann, showed presence of natural gas, but no oil, which the company said was a disappointing result.
Its drilling campaign off the east coast of Canada’s Newfoundland and Labrador province also proved no oil.
Statoil said in January it planned to drill five to seven wells in the Norwegian part of the Barents Sea, which is estimated to hold two-thirds of yet to be discovered hydrocarbons on the Norwegian continental shelf.
The company is currently drilling the third well in the Barents Sea, Gemini North, which it initially planned to drill in June, and has two Arctic wells, Korpfjell and Koigen Central, left to be drilled. Statoil considers the two to be high-impact wells, meaning that each have the potential to provide a total of more than 250 million barrels of oil equivalent (MMboe) to Statoil and any partners, or 100 MMboe net to Statoil alone.
“The plans to drill those two wells remain in place. We will move to drill Korpfjell after completing Gemini North,” a Statoil spokesman said.
In July, Statoil kicked off its drilling campaign offshore U.K., which includes three wells.