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STATOIL

Statoil blows $2.5bn on Brazil oil field stake

Norwegian oil company Statoil has agreed to shell out $2.5bn to buy a majority stake in Brazil’s Carcará oil field, one of the biggest recent oil discoveries worldwide.

Statoil blows $2.5bn on Brazil oil field stake
Statoil's Peregrino A platform offshore Brazil. Photo: Øyvind Hagen/Statoil
Statoil is buying a 66 percent stake in the Carcará license from Petrobras, the Brazilian state oil company. 
 
“Through this acquisition we are accessing a world class asset, and we strengthen our position in Brazil, one of Statoil’s core areas due to its large resource base and excellent fit with our technology and capabilities,” Eldar Sætre, Statoil’s president and chief executive officer, said in a statement. 
 
Statoil also revealed that it is in discussions with Petrobras over forming a long-term strategic cooperation covering the Campos and Espírito Santo basins, two of the world’s most exciting oil plays. 
 
Exploratory drilling has already confirmed the presence of 53 billion barrels of oil in the Carcará field, and Statoil estimates that a further 36 billion barrels could yet be confirmed.
 
The acquisition comes at a time when the state-controlled giant is seeking to cut costs and reduce staff levels after stubbornly low oil prices and refining margins dragged it into a net loss over the last three months. 
 
Statoil on Wednesday announced that it had lost $307m over the last three months, compared to a net profit of $861m in the same period last year.  The loss came as a surprise to industry analysts who had expected the company to make a net profit of $264m. 
 
A cooperation agreement with Petrobras could be controversial given the ongoing corruption scandal aroun the Brazilian giant. 
 
Statoil in December hired external experts to investigate whether any of its international executives might be involved in the widespread bribery and corruption surrounding the company. 
 
“Statoil is not part of the ongoing investigation, and in our review, we have not found indications that we are involved in the case,” Knut Rostad, a spokesman for Statoil’s international business, told Dagens Næringsliv at the time. 
 
 
 

ENVIRONMENT

Norsk Hydro seals deal with Brazil over environmental dispute

Norwegian metals group Norsk Hydro said on Thursday it has reached agreement with the Brazilian authorities following a dispute over the discharge of untreated water from its aluminium factory Alunorte, the largest in the world.

Norsk Hydro seals deal with Brazil over environmental dispute
Norsk Hydro's headquarter in Oslo. Photo: Vidar Ruud/NTB Scanpix

Brazilian authorities had accused Norsk Hydro of having contaminated the Baracena municipality's waters with bauxite residues which they claimed had overflowed from a deposit basin at the Alunorte plant after heavy rainfall on 
February 16 and 17.

They slapped Norsk Hydro with two fines of 10 million reais (€2.5 million, around $3 million) each and ordered the aluminium supplier to halve its production at the site and suspend the use of the basin. 

“On September 5, Alunorte signed two agreements representing a milestone to resume normal operations at the alumina refinery in Para, Brazil,” Norsk Hydro said in a statement.

Under the terms of the two agreements signed Wednesday in Brazil, Norsk Hydro has committed to paying a total of 160 million reais in fines, investments and food coupons for local communities.

The group also pledges to pour another 150 million reais into local development projects that will benefit communities living near Alunorte.

Norsk Hydro said no timeline has yet been set for the resumption of full operations.

“Neither of the agreements signed include provisions or establishes a timeline to resume normal operations at the refinery. However, Hydro consider the agreements as an important step towards resuming operations,” theNorwegian company said.

'Completely unacceptable'

According to an institute reporting to Brazil's ministry of public health, the discharge into the local river posed risks to fishermen and other local communities living near the Amazon as the water they drink and bathe in has high levels of aluminium and heavy metals. 

Norsk Hydro denies any toxic spill, but admits there was an unauthorised discharge of untreated rainwater.

“Internal and external reviews confirm that there was no overflow from the bauxite residue deposits or harmful spills from the February rain event,” the company said.

Norsk Hydro had in March apologised for the discharge, adding that it was “completely unacceptable and in breach with what Hydro stands for”.

The company will likely benefit from a return to full production capacity, after seeing its second quarter profits hit by the Brazil dispute.

Investors welcomed news of the agreement, bringing Norsk Hydro's share price up 4.5 percent in Thursday mid-morning trading.