Marathon Oil (MRO) is focusing on deepwater operations in a big way. It recently delivered a proposal to the Norwegian Ministry of Petroleum and Energy for development of the Boyla field in the North Sea, which is 65% owned and operated by Marathon, with additional interests held by ConocoPhillips Scandinavia, a subsidiary of ConocoPhilips (COP) and Lundin Norway. It is estimated that the field holds 23 mboe in relatively shallow water depths of 120 meters.

Marathon is adding to its stakes in the Norwegian North Sea with its recent acquisition of Statoil’s (STO) stake in the Vilje field. The current plan is for Marathon to take ownership on September 1, 2012, pending approval of the deal by the Norwegian Ministry of Petroleum and Energy. This deal certainly will help Marathon meet its goal of 150% or greater reserve replacement in 2012, and with less intensive drilling since Statoil reports that the field is producing using vertical drills, without stimulation or enhanced recovery methods.

North Sea Far From Exhausted

Though much of the North Sea can be considered mature fields, this play still has a lot of energy left. Statoil is actively producing from several mature fields, including the Statfjord, the Gullfaks, and the Asgard. Norway recently began providing generous tax incentives to early stage exploration in its North Sea waters, which I think has an influence on Marathon’s recent group of Norwegian deals. I think Marathon might also be working on a solidification strategy, as 34% of Marathon’s first quarter sales volumes derived from its production in Norway, compared to just 3% from the U.K.

To continue reading, click here.