Statoil ASA to sell 15.5% stake in Azerbaijan oilfield to Petronas

Statoil ASA, Norway's biggest energy company, plans to sell its 15.5 per cent stake in the Shah Deniz field in Azerbaijan to Malaysia's Petroliam Nasional Bhd for $2.25 billion as it sought to cut investment and focus on high-value projects, Bloomberg reported.

The transaction includes sales of the interests in the production-sharing agreement of the field, the South Caucasus Pipeline Co as also its holding company, and a 12.4 per cent stake in the Azerbaijan Gas Supply Co, according to the Stavanger-based company's statement today.

With the deal Statoil's capital-expenditure commitments get reduced by about $4.3 billion as the Shah Deniz partners, led by operator BP Plc (BP), invest to expand gas exports in the project's second phase, Bloomberg cited Knut Rostad, a spokesman, as saying in a phone  interview.

''This is yet another sign of Statoil's priority of value over volume, focus on return on average capital employed, cash flow and dividend capacity,'' Teodor Sveen Nilsen, an analyst at Swedbank AB, said in a note to clients.

The deal increased the probability that Statoil would further cut its investment plans for next year, he said.

The exit of Statoil comes after the sale of Total SA's 10-per cent stake in the Shah Deniz project in May as big oil companies look to rein in investments to fight rising costs and falling returns.

"The divestment optimizes our portfolio and strengthens our financial flexibility to prioritize industrial development and high-value growth," Lars Christian Bacher, Statoil's head of development and production activities outside Norway, said in a statement.

The Shah Deniz field is operated by BP with partners TPAO of Turkey, Azerbaijan's SOCAR, Russian oil firm Lukoil and Iran's Nico (Naftiran Intertrade Co), Bloomberg reported.

According to Statoil, its second-quarter production from the Shah Deniz field stood at 38,000 barrels oil equivalent per day.

The EU considers the venture as a means of reducing EU reliance on energy imports from Russia. The project is expected to supply 20 per cent of the EU's needs in the long-term from proven gas reserves estimated at 1.2 trillion cubic meters.

However Statoil would continue to have a presence in Azerbaijan, with its 8.56 per cent stake in the Azeri-Chirag-Guneshli oil field which was also being operated by BP.