Det Norske Seeks 20 Million Barrels More of Sverdrup Field

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Det Norske Oljeselskap ASA is claiming as much as 20 million barrels more of the Johan Sverdrup oil field as it appeals a government decision that reduced its stake in the giant deposit offshore Norway.

The Trondheim-based company asked the government to raise its stake to 12.23 percent from the 11.57 percent it was awarded in a July 1 ruling by the Petroleum and Energy Ministry, according to an appeal letter dated Tuesday obtained by Bloomberg. The field holds as much as 3 billion barrels of oil, meaning a successful appeal may result in an increase of 20 million barrels.

“Det Norske asserts that the decision is invalid,” it said in the appeal. The ministry has misinterpreted the petroleum act and hasn’t provided sufficient justification for its decision, which constitutes a process error, the company said.

Det Norske, which is controlled by billionaire Kjell Inge Roekke, in February refused to sign a compromise on the distribution of stakes in the Sverdrup field, saying it didn’t sufficiently reflect that the oil on its side of the deposit is worth more. The government, which was forced to step in to settle the dispute, unexpectedly cut Det Norske’s stake by 0.32 percentage points instead of raising it.

First Figure

In its appeal, Det Norske for the first time put a figure on its demands. It said owners of license 265 should have their total Sverdrup stake raised to 60.5 percent from the 57.2 percent awarded in the July 1 ruling by reducing the weighting of license 501 to 38.9 percent. It doesn’t seek to change the 0.6 percent weighting of license 502. Det Norske owns 20 percent of license 265 and 22.22 percent of license 502, implying a claim of 12.23 percent of the field as a whole.

Det Norske declined to comment on whether its claim had changed over time, said spokesman Rolf Jarle Broeske.

The ministry declined to comment on the appeal, which will be processed “without undue delay,” spokesman Haakon Smith-Isaksen said by phone. He declined to provide a more precise time frame.

“The consensus expectation is that this isn’t going to be successful,” Kjetil Bakken, an analyst at Carnegie ASA, said in an interview Tuesday, before the appeal was filed. “It’s almost unthinkable, from my viewpoint, that the government will change that decision.”

Det Norske has said it could take legal steps if it can’t accept the outcome of the appeal. The other owners of Sverdrup, which is scheduled to start production at the end of 2019, are Statoil ASA, Lundin Petroleum AB, Petoro AS and AP Moeller-Maersk A/S.

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