Statoil ASA (STO) is the national oil company of Norway, which holds a majority share in the company. Statoil generates revenue in the exploration and production of oil and natural gas. The company is the largest offshore operator in the world, and as such, the prospect of extracting petro-chemicals out of the ground is becoming increasingly more difficult. Its success in turning its reserves into bottom line profits will likely depend on drilling in very deep water, which is an expensive proposition. Statoil has also diversified its exploration to politically unstable areas, where the benefits of discovering large reserves are tempered by the risk of instability.

What makes both geographic expansion and deepwater drilling financially enticing is the increasing appetite for energy throughout the world, especially in rapidly growing economies such as China, where growing demand has bolstered high oil prices.

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