Statoil ponders rights issue

news.ft.com By Nicholas George in Oslo Published: March 10 2003 22:00 | Last Updated: March 10 2003 22:00

Statoil, the Norwegian oil and gas group, may consider issuing new shares to fund its ambitious international expansion but would look for financial, rather than strategic, investors as originally planned by the government.

Norway's largest company was partially privatised in June 2001 when the government sold an 18 per cent stake through an initial public offering and said a further 15 per cent could be placed with strategic investors. At present market value, the 15 per cent stake would be worth about NKr18.5bn ($2.6bn).

It has been speculated that the most likely home for the stake would be a European downstream partner such as Germany's Ruhrgas or Gaz de France. More recently it has been suggested the equity could be swapped for oil and gas assets abroad.

But Olav Fjell, chief executive of Statoil, said he was cool on the idea of a strategic placement and it was not "written in stone" at the time of the privatisation.

Instead, Mr Fjell believes the state's stake could be diluted by a new issue to the two-thirds level approved by the Norwegian parliament.

"Should there be an opportunity that we saw for an investment that would require new equity, we would take it up with the state and discuss it.

The new cash would be used to finance international expansion as it tries to break its dependence on the Norwegian continental shelf.

Last year less than 10 per cent of the company's oil and gas production of 1.07m barrels a day came from its non-Norwegian reserves, a figure it aims to increase to 40 per cent by 2012.

Outside Norway, Statoil is keen to develop its operations in the Caspian Sea, Venezuela, West Africa and Iran. With the big oil and gas companies now concentrating on profitability rather than production targets, assets were up for sale, Mr Fjell said.