Last year Statoil was in talks with Chinese oil firms to explore for unconventional gas and was hopeful it could announce a deal by the end of 2010. That announcement never came and it is unclear whether it ever will.
The awarding of the prize by the Norwegian Nobel Committee to Liu, serving an 11-year sentence for subversion, infuriated Beijing as the rising Asian power becomes more assertive on the world stage.
“We haven’t managed to make any inroads in China,” Tim Dodson, Statoil’s head of exploration, said.
“There is a reluctance to engage (by) the Chinese ... Obviously what has happened around the Nobel Peace Prize had its impact.”
Dodson, who said Statoil had looked at China’s potential offshore resources but found they were not as interesting as those onshore, suggested Chinese authorities may be reluctant to open their natural resources to other foreign firms too.
“It is genuinely difficult to get any traction in China. You have to wonder whether it is protectionism,” he said.
Statoil aims to grow its oil and gas output by a third to 2.5 million barrels of oil equivalent per day (boed) by 2020.
This year it expects to spend some $3 billion in exploration, around half in Norway and half abroad, drilling some 40 to 50 exploration wells worldwide.
“Going forward you can expect a similar activity level and a similar spending level,” said Dodson.
Following two recent major exploration deals in Angola and Kazakhstan, Dodson said he was working on at least three other material opportunities.
“I hope that I can close at least two of those before year-end,” he said.
Dodson’s priority is to focus exploration activity on its home base in Norway, expand in some key areas abroad where it is present — such as the Gulf of Mexico, offshore Canada and Brazil — and access unexplored areas like the Arctic.
In the Gulf of Mexico, the scene last year of the largest oil spill in US history, Statoil has two rigs exploring, the second one beginning work last Wednesday.
“Ideally we would like to have a higher share of high-impact opportunities in our portfolio,” the English-born executive said.
“We can afford to take somewhat more risks given our size (and) as long as we have a balanced portfolio ... The challenge is to get access to those opportunities because it is extremely competitive.”
Regarding Russia’s Arctic, where Statoil has no exploration activity but has a share in the much-delayed giant Shtokman gas project with Total and Gazprom, Dodson was hopeful Statoil could get access to new acreage via partnerships with Russian firms that have been getting exploration licenses in recent months.
Dodson said he expected more partnership deals as Russian oil firms seek the technical expertise to develop offshore reserves in harsh conditions.
Statoil recently made two major discoveries off Norway, Aldous Major South in the North Sea and Skrugard in the Barents Sea, breathing new life into a region where oil majors have largely stopped looking for new discoveries.
Statoil aims to continue drilling near these areas to find if there is more oil and gas. Towards the end of the year, it will drill on Havis, a prospect near Skrugard that has a high probability of being a significant discovery, said Dodson, and it will drill another well at Skrugard to further appraise its size.
“We will drill other wells in the Barents Sea (after that),” Dodson said. “There is potential for two to three more wells.”
In the North Sea, the firm will drill two more wells near major discovery Aldous Major South once it is done with the drilling on a nearby prospect called Aldous Major North, which began last week. One of those two extra wells could come “quickly,” Dodson said, declining to give a timeline.
In the so-called pre-salt blocks off Angola, where Statoil has two concessions to operate and three to participate in and where Dodson believes billion-barrels discoveries can be made, Statoil expects to drill its first exploration wells within two years of signing a production-sharing agreement eyed for completion in September.
