Wednesday 7 September 2016

ConocoPhillips is reportedly looking to find and develop a new field project off Norway, despite seeing earnings plunge from its country operations last year.

The US giant is presently operator of the Greater Ekofisk Area in the North Sea where an expansion effort in recent years has prolonged the lifetime of the field cluster by another 40 years.

It also operates the Tor oilfield off the country where it is looking at a possible redevelopment.

However, that does not appear to be the limit of its ambition, having gained operating stakes in a pair of production licences – one in the North Sea and one in the Norwegian Sea – in Norway’s Awards in Pre-defined Areas licensing round in 2015.

In addition, the company was awarded a 15% partner stake in Statoil-operated PL859 in the newly opened south-east Barents Sea in the recent 23rd licensing round.

A ConocoPhillips spokesman told news site Sysla.no the company “still has a strong belief in the potential” of the country’s offshore play, adding: “Our ambition is to find and develop a new operated field.”

“We have a long-term horizon on activity in Norway,” he added.

The company's commitment to the country comes despite low oil prices that chopped its income from operations off Norway to Nkr18.8 billion ($2.3 billion) last year, compared with Nkr24.9 billion in 2014, to leave it with a full-year pre-tax profit of Nkr4.1 billion – down 67% on the previous year’s figure of Nkr12.5 billion.

Compatriot ExxonMobil has been scaling back its activities off the high-cost country as it focuses on more profitable global plays, while Anglo-Dutch supermajor Shell is apparently also looking to shed North Sea assets following its recent acquisition of BG Group.

Furthermore, BP recently merged its Norwegian assets into local player Det Norske Oljeselskap, which is set to be renamed Aker BP.

ConocoPhillips was earlier touted by an analyst as a possible bidder for Tullow Oil’s stake in the Wisting Central discovery in the Barents, which has now been snapped up by state-owned Statoil.

The US operator has been cutting costs in Norway to cope with a lower oil price regime, having laid off 240 staff and another 400 hired-in workers over the past two years, and the spokesman said 2016 “will be a very demanding year” that could see further cutbacks.

He added though the company was planning an extensive drilling programme at the Ekofisk and Eldfisk fields in the coming years that would yield a large number of new production wells.