Norway Outgoing Oil Minister Says Barents May Exceed Best Hopes

Norway’s outgoing petroleum and energy minister said the Barents Sea would see rising activity and resource estimates for years to come.

“Even the most optimistic estimates for activity and resources may prove to have been quite sober,” Ola Borten Moe said in Oslo today. “Many are spending big resources to make finds, and that increases the chances.”

New exploration, more drilling and the breaking of “geological codes” are creating a “virtuous circle,” the Center Party minister said at a press conference days before his Labor-led coalition will hand power to a government headed by Conservative Party leader Erna Solberg.

Western Europe’s biggest oil producer is pushing into the Arctic waters off its northern tip to compensate for falling production from aging fields in the North Sea. Statoil ASA, Norway’s biggest producer, revived interest in the Barents with the twin Skrugard and Havis finds in 2011 and 2012, the first commercial discoveries there in more than a decade.

Statoil is undertaking its largest ever exploration campaign in the Norwegian Arctic with as many as nine wells, partly to boost the resource base for the Johan Castberg project, which comprises Skrugard and Havis. The two finds may hold as much as 600 million barrels of oil.

While Statoil decided to delay Castberg in June due to rising costs, increased taxes and lower resource estimates, Borten Moe said the development “will happen.”

Permian Rocks

Last month, OMV AG and Lundin Petroleum AB made two oil discoveries in the Barents Sea holding as much as 300 million barrels in total. Lundin’s find was also the first in Permian rocks with sufficient crude flow, opening new possibilities and forcing the Norwegian Petroleum Directorate to review its estimates for undiscovered resources in the area, currently at 7.9 billion barrels of oil equivalent.

Prime Minister Jens Stoltenberg’s government, in power for the last eight years, will present its last budget Oct. 14 and is expected to step down shortly after. The outgoing government will be replaced by a coalition of the Conservative and Progress parties, who will rely on support from the Liberal Party and the Christian Democrats in parliament.

Borten Moe was appointed oil minister in March 2011.

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