Statoil Sees Limited Upside in Sverdrup ‘Basement’ After Well

Statoil ASA, Norway’s largest oil company, said it sees limited potential for raised estimates in the lower levels of its giant Johan Sverdrup discovery after drilling a dry well.

A sidetrack well failed to find oil at the Cliffhanger South area as well as in a secondary target in the “granitic basement,” the Stavanger-based company said today in a statement on its website.

“The core samples from this section contained oil shows, but were confirmed to be non-producible,” Statoil said. “The findings reduce the possibility for upside potential in the basement section in the Johan Sverdrup area.”

The Sverdrup discovery, which could hold as much as 3.6 billion barrels according to operators Statoil and Lundin Petroleum AB, has rekindled interest in the Norwegian North Sea, where crude production from maturing fields has dropped by half since peaking in 2000.

“Statoil still sees potential in the Cliffhanger North area,” said Gro G. Haatvedt, Statoil’s senior vice president for exploration in Norway, in the statement. The company plans another well in the coming months, she said.

Statoil also drilled a second well in the western part of Sverdrup, which contained an 82-meter oil column with test production of about 6,000 barrels a day. Statoil and its partners at license 265 found flow properties in the upper part of the reservoir ‘exceptional,” the company said.

The well is the largest oil column in the field to date, according to Statoil.

Statoil slipped 1 percent to 125.9 kroner as of 11:16 a.m. in Oslo. The benchmark OBX index slid 0.9 percent.

The company has a 40 percent stake in license 265, while Det Norske Oljeselskap ASA holds 20 percent, Petoro AS, which manages Norway’s direct stakes in its oil and gas, has 30 percent. Lundin Petroleum holds the remaining 10 percent.

Before it's here, it's on the Bloomberg Terminal.