Statoil Fails to Find Oil at Lovund as ‘Well to Watch’ Is Dry

Statoil ASA (STL), Norway’s biggest oil and gas producer, failed to find petroleum at the Lovund prospect in the Norwegian Sea after saying last year it was a “well to watch.”

The exploration well, the first at license 386, will be abandoned, the Norwegian Petroleum Directorate said today in a statement on its website. The prospect, in the Helgeland Basin northwest of Trondheim, was drilled to a depth of 2,988 meters (9,800 feet) below the sea.

Statoil is seeking new finds to counter falling output at aging deposits and increase production by a quarter to 2.5 million barrels of oil equivalent a day in 2020. In November, the Stavanger-based company included Lovund on its “wells to watch” list for 2013, together with the Lupin prospect in the North Sea and Apollo in the Barents Sea.

“It’s a little disappointing,” Ole-Jacob Storvik, an analyst at Fearnley Securities AS in Oslo, said in a telephone interview from Oslo. “But they’ve had a very good exploration year in 2012, both in Norway and internationally.”

Statoil, two-thirds owned by the Norwegian state, operates about 80 percent of the country’s oil and gas production. It made two “high-impact” discoveries off Norway last year, which are defined as holding more than 250 million barrels of oil equivalent or 100 million barrels net for Statoil.

Statoil fell as much as 1.2 percent to 144.8 kroner in Oslo trading, and was at 145 kroner as of 12:04 p.m. local time.

To contact the reporter on this story: Mikael Holter in Oslo at mholter2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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