Statoil Frustrated at Castberg After Finding Gas Not Oil
Statoil ASA (STL), Norway’s biggest energy company, made a second natural-gas discovery near the Barents Sea’s Johan Castberg oilfields, failing to boost crude reserves at a project delayed by rising costs and taxes.
The Iskrystall find may hold as much as 25 million barrels of oil equivalent in gas, Statoil said today in a statement. After the Nunatak gas discovery, which wasn’t commercially viable, it’s the second of four wells to be drilled around Johan Castberg’s twin fields in an attempt to add to the 400 million to 600 million barrels of crude in estimated reserves.
“Our main goal was to find oil in Iskrystall, but unfortunately it did not materialize,” Gro Haatvedt, Statoil’s senior vice president for exploration in Norway, said in the statement. “We still believe we can prove more oil resources in the Johan Castberg area and will continue our exploration effort with two more wells in the Skavl and Kramsnoe prospects.”
Statoil fell 0.4 percent to 134.7 kroner at 10:09 a.m. in Oslo trading.
The company in June delayed an investment decision at Castberg, putting a planned pipeline and terminal at the North Cape on hold, after costs escalated and Norway unexpectedly imposed higher taxes on oil producers. The company and partners Eni SpA (ENI) and Petoro AS are now studying cheaper solutions to develop Castberg, which comprises the Skrugard and Havis finds.
“It is necessary to conclude the remaining exploration wells and ongoing work on field development plans until the partners are ready to make an investment decision,” Haatvedt said today. Stavanger-based Statoil will now move the West Hercules rig to the Skavl prospect, 5 kilometers (3 miles) south of Skrugard.
Norway’s oil industry is expanding into the Arctic waters of the Barents Sea in an attempt to compensate for dwindling crude production from aging fields in the North Sea, set to fall for a 13th consecutive year in 2013.
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