It's been a big week for Statoil's (NYSE: STO) offshore exploration and production business. The company announced a new discovery in the Barents Sea and settled with U.S. officials to keep its leases in the Gulf of Mexico's Julia field.
Norway's oil
Statoil announced a discovery off the northern tip of Norway in the frigid waters of the Barents Sea on Monday. The Havis field prospect is close to Statoil's prized Skrugard field, discovered in April of last year. Havis may hold 200 million to 300 million barrels of oil equivalent, bringing the collective estimated reserves of the two fields to about 600 million boe. Italy's Eni (NYSE: E) has a 30% stake in the field as well.
The news is great for Norway's oil business, which has suffered a slump in the last 10 years. The country estimates oil and gas companies will invest $31 billion in developing energy there this year.
The discovery comes on the heels of a flurry of activity for Statoil. The company bought U.S. oil and gas outfit Brigham Exploration, secured two stakes in Angola's pre-salt fields, and made what may have been the largest offshore discovery in the world last year.
Warmer waters
On top of new discoveries, Statoil renegotiated important leases in the Gulf of Mexico. The company and its partner ExxonMobil (NYSE: XOM) were both at risk of losing lucrative leases in the Julia deepwater field in the Gulf of Mexico. The partner companies failed to develop a production plan or follow federal rules for a lease extension, and risked losing access to a field that could hold an estimated 1 billion barrels of oil.
Through the combined powers of compromise and attorneys, the two companies were able to negotiate a settlement with the U.S. government that allowed them to keep their leases, while conceding increased royalty rates and agreeing to begin producing oil by 2016.
According to The Wall Street Journal, Exxon was at risk of losing this multibillion-dollar asset, but the settlement now allows it to "develop this very large, but technically challenging, resource as quickly as possible using a phased approach."
Admittedly, the phrases "technically challenging," "quickly as possible," and "Gulf of Mexico" give me pause. Fingers crossed that Exxon and Statoil are more conscientious about deepwater drilling than they were about filling out paperwork.
Foolish takeaway
Its recent activity is proof that Statoil is working hard to boost production and return value to shareholders. As with all hydrocarbon development, however, it remains to be seen whether or not the Norwegian energy giant's assets will ultimately produce as expected.
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