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Statoil (STO -0.8%) may be getting cold feet on its plans to drill off Alaska in the wake of...

Statoil (STO -0.8%) may be getting cold feet on its plans to drill off Alaska in the wake of Shell’s problems in the area, and is ruling out output from the region in its North American production target. STO’s head of international exploration says the company is still assessing whether it will start Alaska drilling in 2015, at a later date or “if we won’t drill at all."
Comments (5)
  • Veritas1010
    , contributor
    Comments (1313) | Send Message
     
    If STO is the (self) acknowledged champion of E&P in the coldest environs on Earth, why would it shy away here in Alaska when it maintains aggressive hopes in areas like Spitsbergen (North of Norway) and Northern Russia off-shore???
    8 Mar 2013, 01:26 PM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Veritas,

     

    Perhaps they're not comfortable with the environmental/political risk that seems to be in play in Alaskan waters?
    8 Mar 2013, 06:47 PM Reply Like
  • Veritas1010
    , contributor
    Comments (1313) | Send Message
     
    Hello Old Trader:

     

    Yes, that I think is the most obvious answer, and it was therefore one I discounted as being too transparent.

     

    I find it hard to imagine that any large and diversified oil exploration company would not seriously appraise the environmental quid pro quo with the potential for both short and long term gain - and now suddenly arrive at a conclusion not in keeping with its past appraisals. Additionally, the US while not being arguably as stable (or at least let's say predictable) politically, it still seems to represent a regulatory know quantity versus even Canada which for example has shown greater unpredictability with regard to foreign strategic asset ownership from abroad.

     

    I am curious I suppose, and would have projected myself that if STO was experiencing a more cautious wave of analyzing deep sea drilling in the far north it would have first focused on it 'alliance' with the Russian Federation in this regard - or even Norway itself with strict domestic and EU environmental strictures and consequences of a misstep.
    9 Mar 2013, 10:05 AM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Hi Veritas,

     

    You're correct, I believe, in suggesting that my comment/observation is somewhat "transparent", but sometimes "a cigar IS just a cigar", *s*. To expand a bit, I wonder if what befell Shell's efforts didn't raise something of a "red flag" for STO? While no "angel", I don't believe that Shell has a reputation for being unduly reckless in their operations, yet the US certainly made no effort to ease their path. In fact, the argument could be made that the opposite happened.

     

    I agree that Canada provides a somewhat interesting example. It seems that they embark on a "reasonable" course of action for an extended period of time, but then suddenly, do something "out of left field" (thinking of the "Halloween Massacre" anumber of years ago in the income trust sector as one example).
    10 Mar 2013, 12:51 PM Reply Like
  • Veritas1010
    , contributor
    Comments (1313) | Send Message
     
    Hi Old Trader:

     

    STO was recently downgraded. Not that I pay too much attention to this, but with the market on a wild tear and STO about the only equity down today it did give me a moment to pause.

     

    Of course, quite frankly if I had the funds sitting around at the moment I would just go out and accumulate a few more shares - especially in advance of the yearly dividend.

     

    I still think STO is a good long term investment. Hope I'm right...
    Aaah, yes. "(Sometimes) a cigar IS just a cigar. One of my favorite analogous remarks. Again good to speak with you again.
    14 Mar 2013, 06:51 PM Reply Like
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