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Norway Boosts Estimate on Barents Oil, Gas Resources by 31%

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Feb. 27 (Bloomberg) -- Norway, western Europe’s biggest oil and gas producer, raised its estimate for undiscovered resources in the Barents Sea by 31 percent to 8 billion barrels of oil equivalent as it seeks to open new areas to exploration.

Seismic surveys in waters previously disputed with Russia indicate that about 85 percent of the additional resources could be natural gas and the rest oil, the Norwegian Petroleum Directorate said today. The new resources are estimated at 1.9 billion barrels of oil equivalent, with a range spanning from 350 million to 3.6 billion barrels.

“The increased resources represent enormous value for Norwegian society,” Petroleum and Energy Minister Ola Borten Moe said in a statement. “It’s especially good news for northern Norway, which now in earnest can position itself as Norway’s next oil province.”

This is the first assessment published for the south-eastern Barents Sea, which the government plans to open for exploration this year after Norway and Russia struck a delimitation accord in 2010. Producers such as Statoil ASA are expanding into the sea off Norway’s northern tip as production falls from maturing fields in the North Sea. The country’s oil output is estimated to drop for a 13th consecutive year in 2013, to less than half the 2000 peak, according to the NPD.

Licensing Round

The Skrugard and Havis oil discoveries in 2011 and 2012, the first commercial finds in the Barents Sea in a decade, have boosted interest in the region, which holds 72 of 86 new licenses that Norway will award in its 22nd round over the next few months. The twin finds in the western part of the Norwegian Barents Sea may hold as much as 600 million barrels of oil and will start production in 2018 thanks to a new oil terminal at Cape North that will also be able to handle volumes from additional discoveries in the area.

Total undiscovered resources in the Barents Sea now amount to 7.9 billion barrels of oil equivalent, according to the NPD. That represents 42 percent of all undiscovered resources offshore Norway, up from 37 percent before the new estimates were published today.

At the end of last year, Norway estimated it had total resources of 85.5 billion barrels of oil equivalent, including already pumped reserves.

The NPD will continue its seismic surveys of the north-eastern part of the Barents Sea this year. “The resource figure from this area will further increase the estimate for undiscovered resources,” the agency said.

The area to be opened in the Barents Sea include five zones, of which the Bjarmeland Platform farthest north and the Fedinsky High in the east, which stretches into Russian territory, are considered “pure gas provinces,” the NPD said.

Jan Mayen

The agency also published estimates for an area off the Jan Mayen island, situated 1,000 kilometers (620 miles) west of Norway and 600 kilometers north of Iceland. The area could hold about 570 million barrels of oil equivalent, with the estimate range spanning from zero to 2.9 billion barrels.

“There’s a lot of uncertainty surrounding the petroleum potential in the area, because we have less knowledge here than for example in the south-eastern Barents Sea, where exploration wells have been drilled in bordering areas which are already open to petroleum activity,” the NPD said.

Norway’s government plans to open the Jan Mayen area at the same time as the new Barents Sea blocks bordering Russian waters.

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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