Norwegian state-controlled Statoil has signed an agreement to buy US Hess' 3.26% stake in the Barents Sea Snohvit Unit and adjacent production licenses for a post-tax amount of NOK1 billion ($177 million), it said Friday.
Statoil is acquiring Hess' 11.25% participation interest in PL097 and 8.33% in PL110, together constituting a 3.26% participation interest in the Snohvit Unit and in the Hammerfest LNG facility located at Melkoya.
The Hammerfest LNG facility has a long history of production problems, and even when first commissioned many months late in 2007, it operated below nameplate capacity.
Additionally, a 3.26% participation interest in PL110B, PL110C, PL448 and PL488 is part of the agreement between Statoil and Hess. The effective date of the transaction is January 1, 2011.
The agreement is subject to relevant government approvals, after which Statoil's stake in Snohvit will be 36.79%.
Snohvit had substantial remaining resources in an area that has been revitalized through recent discoveries and the delineation agreement between Russia and Norway, said Oystein Michelsen, executive vice president for Development and Production Norway.
"Increasing the owner share in the Snohvit Unit strengthens Statoil's position in a core asset which is a focal point in the Barents gas value chain and in the company's ambitions in the Barents region in general.
Snohvit is currently the only facility in the area and will be crucial in enabling gas export solutions for other discoveries," he added.
He described the acquisition as a step toward strengthening its position in the Barents Sea. "Snohvit is a large field that will yield production, activity and value creation for at least 30-40 years," he added.
After the deal, the partners in Snohvit will be operator Statoil (36.79%), Norway's Petoro (30%), France's Total (18.40%), French GDF Suez (12%) and Germany's RWE Dea Norge (2.81%).
