Statoil to boost drilling; Other co’s will cut, report says

The drilling rig Aker Barents in the Barents Sea. (AP Photo/Harald Pettersen / Statoil via Scanpix Norway, FILE)
The drilling rig Aker Barents in the Barents Sea. (AP Photo/Harald Pettersen / Statoil via Scanpix Norway, FILE)

The Norwegian multinational oil and gas company Statoil is boosting its exploration budget this year.

Statoil announced on Wednesday it plans to drill about 30 exploration wells in 2017, an increase of roughly one-third compared to last year. More than half of the wells will be drilled offshore, on the Norwegian Continental Shelf. Some will explore new frontiers, like Indonesia and Suriname, the company said. Statoil also will drill in the Gulf of Mexico, Russia and Turkey.

But Statoil seems uniquely well-placed among the major oil companies this year. Most will cut capital spending by about 15 percent, according to a report released this week by the bond credit rating agency Moody’s Investors Service, following reductions of about 20 percent in 2015 and ‘16. “After a spate of completions of large new projects, these sustained spending cuts will only hurt longer-term production growth,” Moody’s vice president Elena Nadtotchi said in the report.

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Still, a modest rise in the price of oil — to as high as $60 per barrel this year — should help the integrated oil companies with cash flow, increase confidence in the industry and boost North American mergers and acquisitions, the report said.

But the oilfield services and drilling sector, Moody’s said, will have another tough year with weak customer demand, overcapacity and a high debts.

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