Nearly 300 employees on oil and gas drilling rigs off Norway could go on strike unless a labor deal is agreed by June 22, the country's state-appointed mediator says.
Rowan's (RDC -2.9%) Viking and Gorilla rigs would be affected, according to one of the unions involved in the wage talks; it is not clear if other rigs would be affected.
The Gorilla rig works for ConocoPhillips (COP -2.8%), which says the rig is engaged in the plugging of abandoned wells on its Ekofisk field in the North Sea and that oil output would be unaffected by a strike; the Viking does work for Swedish oil firm Lundin (OTCPK:LNDNF).
Norway’s government, seeking enhanced competition in the country’s oil industry, says it wants Statoil (STO +2.1%) and Lundin Petroleum (OTCPK:LNDNF) to remain rivals after the two companies deepened ties earlier this month.
Norway's state-controlled STO increased its interest in Sweden’s Lundin to 20.1% from 11.9% on May 3, after saying previously it had no plans to do so.
STO's move has prompted some analysts to suggest the company could be considering a complete takeover of Lundin, although STO CFO Hans Jakob Hegge has reiterated that the company has no plans to further increase its stake.
Norway's crude output has been chopped in half since 2000 and seeks to attract more companies to compete with STO, which operates more than 70% of the country’s petroleum output.
The government offered 10 drilling licenses to 13 different companies, including Chevron (CVX -0.3%), ConocoPhillips (COP +0.1%), Statoil (STO +0.1%), Lundin Petroleum (OTCPK:LNDNF) and Russia's Lukoil (OTCPK:LUKOY, OTC:LUKOF).
STO, Norway's dominant oil company and 67% owned by the government, was awarded the operating rights on four of the new licenses; three of the 10 licenses were awarded in a previously disputed area with Russia in the southeast Barents Sea.
Companies that applied but were not awarded any licenses include BP and Russia’s Rosneft (OTC:RNFTF).
Statoil (STO -2.9%) agrees to pay $68M plus its 15% stake in the Edvard Grieg oil field in the North Sea to Lundin Petroleum (OTCPK:LNDNF) in exchange for an increased stake in the company.
The deal increases STO's share of the North Sea's Johan Sverdrup oil field, a $13B project estimated to hold up to 3B barrels of crude which has a breakeven of less than $30/bbl for the first phase of the project.
Following completion of the deal, STO will own ~68.4M shares of Lundin, or 20.1% of the shares and votes.
Statoil (NYSE:STO) has increased its exposure to its home market by buying a big stake in Lundin Petroleum (OTCPK:LNDNY), boosting its presence in the Johan Sverdrup field, Norway's biggest offshore project in decades.
The Norwegian state-controlled oil major bought 11.9% in the Swedish company for SEK4.6B ($539M) making the acquisition Statoil's first big deal since oil prices started collapsing 18 months ago.
BP (BP -5.3%) is downgraded to Underperform from Neutral at BofA/Merrill, which foresees a shortfall in free cash flow as the company faces a three-legged “trilemma” in accordance with the need to maintain dividend, credit rating and its reserve basis.
BofA projects falling refining markets at European Integrated oil companies, with the decline in the midstream industry expected to be below “mid-cycle levels” by 2016, which will cause companies to cut capex in order to maintain and deliver dividends on time.
The firm prefers exposure to Lundin Petroleum (OTCPK:LNDNF) and Genel (OTCPK:GEGYF) due to the high quality of their exploration and production sectors.
Barrick Gold's (ABX +0.3%) says it has closed its Zaldivar copper mine in Chile for safety reasons after heavy rains swept across the country's northern desert region this week, increasing to eight the number of copper miners that have been affected by the bad weather.
No. 1 copper miner Codelco already had suspended mining operations at its Chuquicamata, Ministro Hales, Radomiro Tomic, Gabriela Mistral, and Salvador deposits due to the state of roads and mine access following the rains.
Other mines affected by the rains include Antofagasta's (OTC:ANFGF) Michilla mine and Centinela copper complex, Anglo American's (OTCPK:AAUKF, OTCPK:AAUKY) Mantoverde and Lundin Mining's (OTCPK:LNDNF) Candelaria.
Lundin says the major focus of its 2015 capital budget will be the completion of development projects on Boeyla, Bertam and Edvard Grieg, which will increase its production to 75K boe/day.
The spending figures do not include the giant Johan Sverdrup field in the Norwegian sector of the North Sea, and Lundin expects to firm up those figures only after the field's development plan is submitted in February.
Statoil (NYSE:STO) says its Johan Castberg oil discovery in the Arctic Barents Sea can be developed profitably even after Brent crude prices have tumbled more than $35 to below $80/bbl from a June high.
Developing Castberg with an FPSO unit remains the cheapest option, according to a STO exec, who adds that nearby finds by Lundin Petroleum (OTCPK:LNDNF) have raised the possibility that a combined development including a new onshore oil terminal at North Cape can be commercially viable.
Norway's Barents Sea, estimated to hold 40% of Norway’s undiscovered resources and seen as key to halt a long decline in the country’s crude production, lacks infrastructure including terminals and pipelines.
Lundin Petroleum (OTCPK:LNDNF, OTCPK:LNDNY) says it made a significant discovery of up to 310M barrels of crude oil in the Alta prospect in Norway's Barents Sea, potentially accelerating development of the Arctic region’s resources.
Lundin estimates the discovery holds 125M-400M boe, with 85M-310M barrels of crude.
If the upper range is confirmed, Alta would be one of the biggest oil discoveries in Norway since 2000, even if well below the giant 2010 Johan Sverdrup discovery estimated at 1.8B barrels.
Statoil (STO +0.7%) is seeking talks with Lundin Petroleum (OTCPK:LNDNF) to link the Gohta discovery to STO's Johan Castberg field to determine whether developing the Arctic fields together will make both projects viable by reducing the cost of connecting them to shore via a pipeline.
The talks are still at a “working level” and aimed at finding a joint solution for infrastructure, Lundin CEO Ashley Heppenstall says.
In June, STO again postponed a development decision for Johan Castberg after an exploration campaign aimed at boosting volumes and making the project more profitable uncovered crude in only two of five prospects.
Spanish media says domestic oil company Repsol (REPYY, REPYF) is poised to make a bid of €2B ($2.7B) for Marathon Oil's (MRO) assets off Norway in a move to optimize its own portfolio.
Sweden's Lundin (LNDNF, LNDNY) is among a lineup of 10 bidders angling for the MRO's portfolio, with possible participation by Asian players, according to the head of Oslo-based research firm Rystad Energy.
Analysts say MRO could announce a deal for the assets as soon as mid-June after bids were submitted earlier this month.