Statoil ASA(ADR) (NYSE:STO) has announced that it has put its drilling efforts at the Barents Sea on hold following a Court order demanding the company to do so.
Statoil was forced to stop its drilling operations in the Barents Sea after it received a court order to do so, in connection with its ongoing legal battle with a firm called NeoDrill. The latter provides drilling technology products in Norway. The court order was issued by the Stavanger District Court. The injunction restricts the company from using Cap-X drilling technology in the Arctic for subsea developments.
Statoil claims that the court’s decision is based on wrong information
NeoDrill argued that the Cap-X drilling technology was copied from its proprietary Conductor Anchor Node technology. The technology is capable of lowering expenses by as much as 30 percent. The claim that Statoil has been using technology stolen from NeoDrill is the origin of the legal battle between the two companies. The integrated energy company argues that the court’s decision to issue a court order to halt the drilling activities was made based on wrong information.
Statoil has five drilling wells in the Barents Sea, including the Blaamann well where the firm was drilling at the time the court order was issued. It is currently not clear when the company will resume its drilling activities though it is still confident that it will finish its activities in all the five wells before the end of this year. This means the company is working quickly towards settling the legal battle with NeoDrill.
Statoil also pointed out that it plans to restart its drilling activities using alternative technology and that it is committed to bringing the Barents Sea project to a completion. It also intends to do so within the projected time deadline. Despite the high hopes, the court order definitely affects the company and could potentially lead to delays in the drilling process. This might be a huge setback for the company if it fails to deliver before the end of the year. However, Statoil is working towards dealing with the issue.
Statoil stock closed the latest trading session at $13.42.
