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Statoil acquires 25% of 50 Conoco OCS Chukchi leases
In a deal involving cash and trades, Statoil is acquiring a 25 percent working interest in 50 ConocoPhillips Chukchi Sea leases while ConocoPhillips will acquire some of Statoil’s acreage in the Gulf of Mexico.
The companies said Jan. 25 that the Chukchi Sea leases are those acquired by ConocoPhillips in the 2008 federal outer continental shelf lease sale. ConocoPhillips will retain operatorship and majority working interest in these leases.
“Statoil’s decision to acquire interest in these leases substantiates ConocoPhillips’ view that world-class hydrocarbon potential exists in the Chukchi Sea of Alaska,” Larry Archibald, ConocoPhillips senior vice president for Exploration and Business Development, said in a statement. “ConocoPhillips has had a long-term business relationship with Statoil in many ventures around the world, particularly in Norway, and welcomes its expertise in this harsh operating climate,” he said.
The companies have conducted joint operations for more than 30 years on the Norwegian continental shelf, and said that operating experience has allowed both companies to gain expertise in tackling harsh environments and to develop new technology to enhance recovery from existing fields.
“The Chukchi Sea in Alaska is a new frontier area for all operators and we believe that companies like Statoil and ConocoPhillips are among the best companies to take on this exciting journey together. By adding on these leases to the 16 we already have in Chukchi, we have now acquired a sizable acreage portfolio to explore in the coming years,” said Tony Dore, heading up Statoil’s exploration group in North America.
Both acquired tracts at sale
Both companies acquired tracts in the 2008 Chukchi sale.
ConocoPhillips spent more than $506 million for 98 tracts. Statoil, then known as StatoilHydro, had $14 million in high bids on 16 tracts, partnering with Eni Petroleum on 14 of the bids (StatoilHydro 60 percent and Eni 40 percent).
Shell was the dominant bidder at the sale, with $2.4 billion in high bids for 275 blocks and has permitting under way for a 2012 drilling program (see story in this issue).
After the 2008 Chukchi Sea sale, StatoilHydro told Petroleum News that the company saw the Chukchi as the next step after its Arctic projects off Norway, and said the Chukchi shared many traits with projects it has done, including harsh conditions, isolated areas and the possible need to find partners.
“With more than 30 years of offshore experience from the Norwegian continental shelf we believe we can build on this and develop our capabilities further by involving us in the future oil and gas development in the Chukchi Sea,” a company official said in an e-mail after the 2008 sale.
The North Slope Borough mayor’s office told Petroleum News in November that Statoil has already taken borough Mayor Edward Itta and key borough staff members for a tour of its offshore Norway oil and gas facilities. That trip included meetings with fishing groups and government agencies, entities that occasionally clash with the oil and gas industry. The meetings included discussions about how such disputes are resolved in Norway.
First drilling in 2012 ConocoPhillips is targeting its first well in the Chukchi in 2012 and Archibald talked briefly about the Chukchi at the Alaska Support Industry Alliance annual Meet Alaska conference in Anchorage Jan. 22.
“We control the prospect we refer to as Devil’s Paw and have some acreage on a prospect Shell refers to as Burger as well. We really are pleased that there’s a giant potential here and we’d like to test it,” he said.
ConocoPhillips Alaska spokeswoman Natalie Lowman told Petroleum News that the leases in which Statoil acquired an interest “are those covering the Devil’s Paw prospect.”
Although the Chukchi Sea is largely unexplored, more than 100,000 line-miles of seismic data have been collected, revealing subsurface geology that the U.S. Minerals Management Service has estimated could hold 15 billion barrels of oil and 76 trillion cubic feet of natural gas. Only five wells have been drilled in the Chukchi, in the late 1980s and early 1990s, but those confirmed the presence under the Chukchi of some North Slope-equivalent stratigraphy.
In addition to financial considerations from Statoil, ConocoPhillips will also acquire 50 percent working interest in 16 Statoil-operated Gulf of Mexico leases and will acquire all of Statoil’s 25 percent working interest in five additional GOM leases operated by ConocoPhillips.
—Kristen Nelson
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