Recent oil discoveries in Norway’s Arctic Barents Sea, including one by Lundin Petroleum AB, have made the case for the construction of billions of dollars of export infrastructure, the Swedish oil explorer said.
“These discoveries alone are sufficient to be able to justify infrastructure starting to develop,” Lundin’s Chief Executive Officer Ashley Heppenstall said at a presentation in Oslo today. “Don’t ask me how or when but it’s coming.”
Stockholm-based Lundin, together with Austria’s OMV AG, made finds containing as much as 300 million barrels of oil in the Barents region last year. That helped revive optimism in the region after Statoil ASA shelved plans to build a $15 billion oil hub there for its Johan Castberg project because of rising costs and higher taxes.
Norway’s oil industry is pushing into the Barents Sea to compensate for aging fields in the North Sea, where crude production has dropped by more than half since a 2000 peak. The Norwegian part of the Barents Sea holds more than 8 billion barrels of oil equivalent in undiscovered resources, according to estimates from the Norwegian Petroleum Directorate. Oil and gas explorers including Statoil and Lundin plan to drill a record 10 wildcat wells there this year, the NPD said.
Lundin will drill two exploration wells in the Barents Sea in addition to an appraisal well at the Gohta discovery, which may hold as much as 145 million barrels of oil, the company said in presentation material today. The find was Norway’s first in Permian rocks, opening a new exploration model in the Loppa High area, the company has said.
“Watch this space, because this is emerging,” Heppenstall said. “There’s still a lot of uncertainty but the prospect sizes are big.”