…BUT WHO SAYS DAR ES SALAAM STOCK EXCHANGE (DSE) NOT YET IN MIND
By Jaston Binala
Investment pundits have painted the Norwegian oil and gas giant, STATOIL–which operates in Tanzania, to be a healthy corporation in which personal investment could be made at the Stock Exchange. But Genevieve Kasanga, Head of Communications for this corporation here in Tanzania, told Tz Business News Statoil has not considered cross- listing on the Dar es Salaam Stock Exchange. The Norwegian corporation is listed on the New York Stock Exchange.
“We appreciate Statoil’s endeavor to improve recovery of resources in mature fields. The company has operations in all major hydrocarbon-producing regions of the world, with an emphasis on the Norwegian Continental Shelf (NCS),” the US-based investments research organization Zacks Equity Research has said in an investor advisory note. “We believe that Statoil is well positioned to sustain its steady production growth for the next few years on the back of its large resource base at NCS.
“In recent times, Statoil has delivered strong exploration results, adding significantly to its resource base by making several high impact discoveries. The latest finds give the company access to new regions of Norway, Russia, Azerbaijan, Tanzania as well as Australia. These strengthen the company’s position and pave the way for profitable long-term growth,” the research firm has said.
Statoil is listed on the New York Stock Exhange. In a recommendation to investors in February 2013, Zacks Equity Research said Statoil had “underperformed.” The current recommendation has moved a notch higher . The investment researchers say they have now become “neutral.”
“We are maintaining our Neutral recommendation on Statoil ADRs. The company posted higher-than expected earnings in the most recent quarter, mainly due to improved volumes and prices for both liquids and gas. Moreover, Statoil came up with a strong balance sheet, exited from low-profit generating operations and broadened its international asset base, Zacks observe.
“The addition of new projects is expected to produce a CAGR growth rate of 2% to 3% annually during the 2013 to 2016 period. While the company is fairly active in its development operations, we are staying on the sidelines. As hiccups remain in the company’s production growth in the short term, we expect Statoil to perform on par with the broader market.”
Here in Tanzania, Statoil works in partnership with the Tanzania Government through Tanzania Petroleum Development Corporation (TPDC) in its search for oil and gas on Block 2 located in the deep sea Indian ocean area on the south east of the nation. TPDC is the license holder while Statoil brings in the expertise and financing.
This partnership, according to some observers, suggests the Tanzania government is committed to its resolve to link with stronger, reliable corporations. The Permanent Secretary in the Ministry of Energy and Minerals, Eliakim Maswi once said Tanzania had learned from the past and would be careful who is given investment opportunity in the country. Tanzania was fed up with speculators—the junior companies who come into the country masquerading as investors when they really don’t have any money to invest here. The choices for who is given an opportunity to invest for extracting resources in Tanzania will now be rigourous and careful, Maswi said. Facts at hand suggest Statoil is one of those ‘quality choices’ Tanzania has made.
The Head of Communications at Statoil here in Tanzania, Genevieve Kasanga said in a statement: Statoil is still in its early days of activities in Tanzania. The corporation commenced its drilling operations in late 2011 and made the significant Zafarani discovery in February 2012, which marked the beginning of a successful exploration and discovery journey for Statoil in Block 2 offshore Tanzania, where they work in partnership with ExxonMobil. Statoil’s discovered volumes in Block 2 is 17-20tcf discovered volume.
On listing at the Dar es Salaam Stock Exchange, Ms Kasanga said “Statoil has not yet made its final investment decision for the production of the gas resources in Block 2. Statoil is yet to consider listing into DSE.”
Share prices dropped by 0.4% and 0.1% respectively, for two consecutive trading sessions at the New York Exchange after Statoil announced the results from its first drill stem test in the Tanzania offshore Block 2. However, after a rise of 1.1% in the third trading session, the share price closed at $27.17. Statoil operates on Block 2 in partnership with the American oil giant ExxonMobil Corporation.
The Zafarani-2 operation appraised through two separate intervals. During the test, which was restricted by equipment, gas flowed at a maximum average daily rate of 66 million standard cubic feet. The appraisal proved good reservoir quality and connectivity.
Performed in a water depth of 2,400 meters and about 80 kilometers off the coast of southern Tanzania, the drill stem test operation, was carried out through a re-entry in the Zafarani-2 well. The data obtained through these tests will aid in reducing technical uncertainties in a potential future Tanzania offshore as well as LNG development.
It is believed that the production well rate potential is higher than the rates obtained during the equipment constrained test. The planned appraisal in the Zafarani reservoir will conclude with the completion of the Zafarani-2 operation followed by the appraisal of Zafarani-3 well. This forms the basis of field development in Tanzania’s Block 2. The Zafarani-2 well test announcement was preceded by the Mronge-1 discovery made in Dec 2013. This represented the fifth discovery in Block 2 that brought the natural gas in place volumes up to 17-20 trillion cubic feet.
Statoil operates the license on Block 2 on behalf of Tanzania Petroleum Development Corporation, with a working interest of 65%. The remaining 35% is held by ExxonMobil Exploration and Production Tanzania Limited.
Statoil ASA is a Norway-based major international integrated oil and gas company. The company emerged in its present shape following the acquisition of Norsk Hydro s (NHY) oil and gas business, which was completed on October 1, 2007. With effect from November 2, 2009, Statoil ASA is the name of the erstwhile StatoilHydro ASA.
Though the company has operations in all major hydrocarbon-producing regions of the world, it has an upstream focus on the Norwegian Continental Shelf (NCS). As of year-end 2012, Statoil had approximately 5.422 billion oil-equivalent barrels (BOE) in proved reserves compared to 5.426 billion BOE at the end of 2011.
Due to its strong offshore exposure, Statoil is a leader in subsea production. Statoil’s organic reserve replacement was 110% for 2012 and the 3-year average reserve replacement ratio (RRR) was 100%.
Statoil operates in four segments: Exploration and Production Norway, Natural Gas, International Exploration and Production and Manufacturing and Marketing. Statoil is one of the leading suppliers of natural gas in the European market and has a 21.1% stake in the world s largest offshore pipeline network, Gassled, which transports natural gas from the North Sea to the European gas transmission system.
The company’s refining operations include its 79% stake in the Mongstad refinery in Norway (capacity: 180,000 barrels per day) and a 100% ownership of the Kalundborg refinery in Denmark (118,000 barrels per day).
The company’s retail distribution network consists of about 2,000 Statoil- branded service stations, 470 tank and trucks, and 99 depots in eight countries in northern Europe. The Norwegian government is Statoil’s majority shareholder, with a roughly 67% stake.
Statoil has increased its drilling targets for 2013 and now plans to drill about 60 exploration wells worldwide, up from 50 previously projected and about 20 high impact wells between 2013 and 2015.
The corporation’s recent oil discoveries were made in Flemish Pass Basin, offshore Canada and near Norne. Further, gas/condensate discovery was made in north of Asgard, as well as it entered into a partnership with the Australian oil and gas company OMV in the Wisting Central oil discovery in the Hoop area, Norway.
These are in sync with its strategy of exploring new frontiers and to help create value through active portfolio management. Consequently, these finds also boost its financial flexibility. The company now has operational activities in all onshore assets in the U.S. Bakken, Marcellus and Eagle Ford. This goes to show the company’s focus on succeeding in high impact prospects and expanding operations worldwide.
Statoil aims to achieve an equity production of above 2.5 million barrels of oil equivalent in 2020. The growth is expected to come from new projects from 2014 to 2016 that would result in a compound annual growth rate (CAGR) of 2% to 3% for the period 2012 to 2016. The second stream of projects is expected within the 2016 – 2020 period that would likely lead to a CAGR of 3% to 4%.