Statoil accused of hoarding fallow oil and gas blocks

Oil and natural gas company executives accused Statoil of "hoarding" fallow oil and gas blocks, preventing the development of reserves on the Norwegian Continental Shelf.
The government says developing fallow blocks -- where companies have previously been awarded licenses, but haven't begun any exploration or drilling activity -- is essential for the country to reap its unproduced resources.

The Norwegian Petroleum Directorate estimates 21.4 bn boe petroleum resources remains in the ground.
"We're spending quite a bit of money and time, but the assets aren't being offered for sale," Torstein Sannes, Lundin Petroleum’s managing director for Norway, told operators at an industry conference.
Tim Bushell, managing director of the UK oil company Paladin Resources, said Statoil has a "hoarding mentality."
"Until it starts to change, it's going to be a tight asset market that will constrain growth and companies like us will not be able to invest," Bushell said.

Bushell said Paladin would be looking for "pastures new," to further its growth strategy. Earlier, Paladin said it had paid $ 150 mm for major stakes in two fields in Australia.
Tor Rasmus Skjaerpe, a vice president at government-owned oil and gas company Petoro, also said the lack of asset transactions was a barrier to the development of the continental shelf.
Statoil project manager Svein Loening said, however, the company's main goal " is to develop the assets ourselves."

Statoil spokesman Kristofer Hetland said the company wanted to hang on to the assets because most were satellite fields close to existing Statoil-owned and operated infrastructure.
"That gives us a lot of synergies and prolongs the lifetime of host fields themselves, giving an increased oil recovery," he said. Since most were satellite fields, Hetland said, "The rate of return is rather high since the infrastructure is already there."

He also said the experience gave them insight on enhance oil recovery for tail-end production on larger fields.
Skjaerpe said, though, Statoil's attitude towards smaller reserves will change: "the more international (Statoil) becomes, the more stretched they'll become -- both in capital and human competence."