No to China project

October 12, 1999, 10:00 CEST

Statoil has pulled out of a Chinese offshore project in which it had been offered the operatorship.

The group was in line to receive a 49 per cent interest in the Hainan block, which lies in the Bay of Bohai off north-eastern China. This area forms part of key province containing several of the country's producing oil fields.

Statoil's principal reason for withdrawing from the project is that it fails to meet the group's profitability requirements.

"After a careful technical and commercial assessment, we've decided to turn down an offer to continue," says vice president Bård Johansen in International Exploration & Production, whose responsibilities include China.

The group is still serving as operator on the Lufeng field in the South China Sea together with the state-owned China National Offshore Oil Company. This venture will run until 2001.

Statoil opened a Beijing office in 1997, and Mr Johansen says that future commercial opportunities in China will continue to be monitored from there.

The Chinese are interested in cooperating with western oil companies, and want to benefit from their expertise in technology and management as well as health, the environment and safety.

"We were chosen as a potential partner for the Hainan project partly on the basis of such criteria," says Mr Johansen.