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Statoil makes final investment decision on Shah Deniz Stage 2 and announces a 10 % divestment


Published Dec 18, 2013
The Shah Deniz platform in the Caspian Sea

Statoil ASA has together with partners in the Shah Deniz consortium in Azerbaijan made a final investment decision for the Stage 2 development of the Shah Deniz gas field, in the Caspian Sea, offshore Azerbaijan.

Statoil also enters an agreement to divest a 10% share of its 25.5% holdings in Shah Deniz and the South Caucasus Pipeline.

The BP-operated Shah Deniz consortium today announces the final investment decision for the stage 2 development of the Shah Deniz gas field in the Caspian Sea offshore Azerbaijan. This decision triggers plans to expand the South Caucasus Pipeline (SCPX) through Azerbaijan and Georgia, to construct the Trans Anatolian Gas Pipeline (TANAP) across Turkey and to construct the Trans Adriatic Pipeline (TAP) across Greece, Albania and into Italy. Together these projects will create a new Southern Gas Corridor to Europe. The total cost of the Shah Deniz stage 2 and SCP Expansion projects will be around USD 28 billion.

"The Shah Deniz stage 2 project is a significant project which will make Azerbaijan's large gas resources available for the European market. It brings benefits for customers and creates value for the partners," says Helge Lund, president and CEO of Statoil.

Statoil has also signed an agreement to divest a 10% share of its 25.5% holdings in the Shah Deniz and the South Caucasus Pipeline. The buyers are SOCAR (6.7%) and BP (3.3%). Statoil will as part of this transaction receive a total cash consideration of USD 1.45 billion. The effective date of the transaction is 1 January 2014.

"The divestment corresponds with our strategy of portfolio optimisation based on rigid prioritisation of future investment, and capturing value created from a significant gas position," Lund says.

Statoil will not participate as an investor in TANAP.

"We have considered our potential positions throughout the project's value chain, balancing economics and risks to identify the optimal participation," says Lund.

Statoil holds a 20% share in TAP AG, the owner of Trans Adriatic Pipeline (TAP), which is developing the pipeline for gas transport from Turkey to southern Europe.

Tags: Statoil




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