Statoil ASA (ADR)(NYSE:STO) has exited the Shah Deniz gas project by selling its remaining 15.5% stake to Petronas Dagangan Berhad (KLSE:PETDAG). The Norwegian company will pack off the Azerbaijan project in a wider scheme to up shareholders’ returns.
The latest move comes after the company sold 10% of its stake.
Statoil ASA (ADR)(NYSE:STO) is following after several other companies that have also sold their stakes in different projects due to the rising costs in the industry. Oil prices have also gone down significantly, cutting down on profits.
The company’s Q2 production hit 38,000 barrels on a per day average.
“Statoil has created significant value by participating in the development of this asset over the years and we are pleased to announce this deal with PETRONAS. The divestment optimises our portfolio and strengthens our financial flexibility to prioritise industrial development and high-value growth,” says Lars Christian Bacher, executive vice president for Development and Production International in Statoil.
Even though Statoil ASA (ADR)(NYSE:STO) and its Malaysian counterpart have already come to an agreement, the deal is likely to be concluded early 2015 due to pending approvals by relevant authorities.
Statoil ASA (ADR)(NYSE:STO) is focusing on cutting down on costs and consolidation its market activities to deliver quality to the industry and to boost shareholder earnings.
The Shah Deniz project is run by BP, which has a stake of 28.8%., alongside other partners that include Turkish Petroleum Corporation owning 19%, SOCAR owning 16.7%, and Lukoil and Nico with both having 10%.
Shah Deniz is the largest oil field in the world with the BP project alone delivering 26 billion m3 of gas and 53,000 barrels of condensate daily.
Statoil ASA (ADR)(NYSE:STO) declined to comment on the profit, if any, it will make in its deal with Petronas Dagangan Berhad (KLSE:PETDAG).
This article has been written by Victor Ochieng.