Statoil Sees Chance of Arctic Oil Finds Increased by OMV Success

Statoil ASA sees chances of finding oil in the northernmost area drilled in Norway’s Arctic rising with a recent nearby discovery of crude by OMV AG. (OMV)

“It was really fantastic news for us, being a partner in that license and that of course also increased the probability of oil” to the north, Gro Haatvedt, Norway exploration chief, said today in an interview in Oslo. “The whole area there could then hold a very high potential of oil resources and it would be easier to get commerciality than in gas only.”

Norway’s largest energy company will drill 20-25 exploration wells off the country’s shores, including as many as seven in the Arctic Barents Sea, Stavanger-based Statoil said today in a statement.

The Apollo and Atlantis prospects in the Hoop area that Statoil plans to explore during the second and third quarters are about 50 kilometers (30 miles) north of where OMV found as much as 160 million barrels of crude oil in September.

Norway is expanding into the Barents Sea to compensate for dwindling reserves in decades-old North Sea fields as oil output is seen falling for a 13th year. While discoveries such as Johan Castberg, Wisting and Lundin Petroleum AB (LUPE)’s Gohta are spurring exploration, oil finds are more favorable than natural gas as there’s lack of infrastructure to get the latter to market.

Statoil shelved plans to expand liquefaction capacity last year for its Snohvit gas deposit, the only producing field in the Barents Sea, due to a shortage of resources. The company, operating more than 70 percent of Norway’s oil and gas output, says it would need to add resources of a similar size to the 190 billion cubic meters in Snohvit to build a southbound pipeline.

Johan Castberg

Statoil will also continue exploring the area surrounding Johan Castberg to try to add to resources of 400 million to 600 million barrels of oil. It earlier this year put development on hold because of increased costs, taxes and resource-estimate uncertainty. Beyond the planned Skavl and Kramsnoe prospects, it added Drivis, all to be drilled by early 2014, according to the statement. It’s studying further prospects in the area.

While Statoil has “big expectations” for Hoop and the Castberg area, Haatvedt said the Gohta find, the first in Permian layers in Norway with enough oil flow, opens new possibilities.

“It’s really interesting that another new place is being opened up,” she said. “We have been targeting several of these carbonate reservoirs in the Barents Sea and we haven’t succeeded so far.”

To contact the reporters on this story: Stephen Treloar in Oslo at streloar1@bloomberg.net; 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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