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Statoil to begin operating half of Eagle Ford acreage

BY ALISON SIDER

STAVANGER -- Statoil said Monday it has taken over operation of the eastern half of its Eagle Ford shale oil and gas producing activities in South Texas, an area where it had previously taken a back seat to a partner company.

The move underscores how international energy giants are entering a new, more active phase in their pursuit of booming oil production from U.S. shale formations, as they learn enough about hydraulic fracturing to run operations themselves.

Many overseas companies entered shale fields as passive investors as they sought to figure out the technology that, by cracking oil-and-gas-rich tight rock formations, reversed the secular decline of energy production in the U.S. Total paid $2.3 billion for a minority stake in Chesapeake Energy’s Ohio shale discovery last year, after previously partnering with the company in the Barnett shale in Texas.

On Monday, Chesapeake and Sinopec Group announced they closed a deal that gives Sinopec a 50% stake in Chesapeake' s Mississippi Lime venture for $1.02 billion. In 2010 and 2011, Cnooc bought into Chesapeake' s oil-rich shale fields in South Texas, as well as fields in Colorado and Wyoming. Anadarko Petroleum has partnered with Korean National Oil Corp. in southwest Texas and with a subsidiary of Japanese Trading Company Mitsui & Co. in the Marcellus.

Statoil, which is betting big on North America, has built positions in two other U.S. shale formations since 2008, where it already plays an operational role, the Marcellus, and the oil-rich Bakken shale in North Dakota.

In the Eagle Ford, Statoil partnered with Talisman Energy USA, the U.S. unit of a Canadian energy company. Talisman initially worked as the operator, directing day-to-day oil and gas production activity, while Statoil provided capital for investment. But the two companies agreed last year that Statoil would transition to operating the eastern half of the acreage. Talisman will continue operating the western half.

Statoil aims to produce more than 500,000 boed in North America by 2020, about 20% of its targeted production by that year. In the Eagle Ford, Statoil holds about 73,000 net acres in shale formations.

"This is an important milestone for Statoil' s development as an operator in the U.S.," said senior V.P. for U.S. Onshore, Torstein Hole, in a news release. The company already has operational activities in its other U.S. shale acreage.

"Our organization in Houston is eager to further develop our Eagle Ford holding as operator and we look forward to engaging with communities and landowners in the eastern part of our joint venture acreage," Hole added.

Statoil has already taken over operations on three drilling rigs in the Eagle Ford, and will assume responsibility for producing wells, facilities, pipelines and infrastructure.

Dow Jones Newswires

07/01/2013

 

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