Statoil to Become U.S. Shale Operator by 2013

Monday, June 06, 2011

Statoil ASA (STO, STL.OS), which built its oil and gas expertise in Norway's offshore waters, is stretching its land legs in the U.S., where it seeks to partake of the shale bounty.

 
Like many international oil and gas companies, Norway's Statoil has poured billions into joint ventures with some of the North American independents that in the last decade figured out how to profitably unlock the oil and gas trapped in shale, bankrolling their drilling while hoping to learn some of their techniques. But peering over its partners' shoulders is not enough: Statoil plans to run its own U.S. shale operation in South Texas's Eagle Ford Shale by early 2013, said the company's executive vice president for North America, Bill Maloney.
 
"We have aspirations and definite plans to become an operator in the onshore ourselves," he told Dow Jones Newswires in a recent interview at Statoil's North American headquarters in Houston. The company last October struck a $1.3 billion joint venture deal with Talisman Energy Inc. (TLM, TLM.T) in the Eagle Ford, which allows it the option to become operator.
"We are working towards that," Maloney said.
 
Statoil has been in the shale business since 2008, when it acquired 32.5% of a joint venture with Chesapeake Energy Corp. CHK +0.72% in the Marcellus Shale, a big natural gas-rich rock formation in the Northeastern U.S. for $3.4 billion. Maloney said he sees some expansion in the Marcellus, but added that Statoil is really interested in growing its presence in the Eagle Ford, which is richer in oil.
 
High oil prices have turned the Eagle Ford into one of the hottest drilling basins in the world. On Wednesday, Marathon Oil Corp. MRO -0.02% said it bought $3.5 billion in acreage from a company partially owned by private equity firm Kohlberg Kravis Roberts & Co., in one of the largest deals seen in the region.
 
Statoil is also interested in investment opportunities in other shales around the U.S., Maloney said.
 
Statoil's shale forays underscore the newfound promise found in the U.S. oil patch, once thought tapped out of its energy riches. It is now seen by large international oil companies as a key area for growth, as high oil prices have enabled many developing oil-rich countries to erect barriers to foreign investment.
 
Statoil helped make Norway the third-largest energy exporter, after Russia and Saudi Arabia, but the company's investments now extend all over the planet, from Algeria to Canada to Venezuela.
Its expansion in North America was gradual; throughout the years company made several large acquisitions in Canada and the U.S., including sizable deepwater acreage in the U.S. Gulf of Mexico, a position in Albertan oil sands, and the 2008 Chesapeake deal. By the time Maloney assumed the helm of a newly created North America unit in January, Statoil's assets in the continent had reached a critical mass.
 
Statoil had no employees in Houston in 2003, Maloney said. Now the company occupies nine floors in a high-rise near Houston's energy corridor--three floors more than last year--where nearly 400 employees work.
 
"We saw opportunities; we went after them," Maloney said. "Then, lo and behold, we built something here of size that we needed to separate out." 
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