Statoil exits Shtokman

Gazprom is now taking over the SDAG stake, a source in the company informs. Statoil CEO Helge Lund has already exited the SDAG Board of Directors, Interfax reports.

According to the SDAG source, Statoil can not expect to get returned any of its multi-million investments in the project, Gazeta.ru reports. According to estimates, the three partners of the SDAG have spent a total of $1.5 billion on project preparations.

It remains unclear what will happen with Total, the third SDAG partner. As previously reported, the French oil major still has a major interest in the project and appears ready to continue its cooperation with Gazprom.

The SDAG shareholder agreement expired on 1 July. A new shareholder agreement will include new stakeholders, among them quite likely Shell.

After months of speculations about the fate of the grand Arctic gas project, Statoil’s decision does hardly come as a surprise. As previously reported, Statoil has for a long time been in doubt about its role in the project, and has expressed discomfort both with cost estimates and development models. The company has also stressed that the project will need tax breaks from federal authorities if it is to be economically viable.

Statoil’s exit from the project can still be considered a milestone in the company’s history. The company worked hard for its 24 percent stake, which it successfully obtained in 2007. As a matter of fact, several analysts believe the merger between Statoil and Hydro, the two main Norwegian oil producers, was triggered by both companies’ desire for a Shtokman stake. The merger took place on 1 October 2007, just three weeks before the merged StatoilHydro got the stake.

The decision to leave the Shtokman project will however not result in a down-scale of the Norwegian company’s activity level in the Barents Sea. The company has successfully discovered several new fields on the Norwegian side of the energy-rich ocean, and a new partnership agreement with Rosneft secures a significant and long-term engagement  also in the Russian part.

As a matter of fact, Statoil might have more than enough other activities and plans in the Norwegian-Russian Arctic. The troublesome partnership with Gazprom and the long-dragged and unclear processes with the Shtokman project might in the end have felt more like a burden than an asset for the Norwegian oilmen.