Statoil Makes Arctic Oil Find in Boost for Delayed Castberg Plan

Statoil ASA, Norway’s biggest energy company, discovered as much as 50 million barrels of oil in the Barents Sea in a boost to the delayed Johan Castberg project.

Skavl is the first crude discovery in a campaign of exploration to strengthen the Castberg oil project, which was delayed after costs and taxes rose and because of uncertainty over resource estimates, the Stavanger-based company said in a statement.

“We are pleased to see that our efforts now pay off,” Gro Haatvedt, head of Norwegian exploration, said in the statement. “It is also encouraging that we have confirmed a new play model in the area with the oil discovery in the Fruholmen formation, something which will be followed up in future exploration.”

Statoil, pushing into the Arctic waters of the Barents Sea to counter falling output from aging fields in the North Sea, in June decided to put plans for a pipeline and oil hub at North Cape on hold. That followed escalating costs, increased taxes for oil companies under the previous government and uncertainty over estimates of 400 million barrels to 600 million barrels of oil in the twin Skrugard and Havis finds that make up Castberg.

It’s studying cheaper alternatives for the development and will continue exploring the area surrounding Castberg for oil.

Skavl, which holds between 20 million and 50 million barrels of recoverable oil, was the third well in a campaign of at least five, with the first two proving only gas.

Statoil is moving the West Hercules rig to the Kramsnoe prospect 16 kilometers (10 miles) to the north and will drill the Drivis prospect next year while also considering other opportunities, Haatvedt said.

Skavl proved a 23 meter (75 feet) oil column and 22 meter gas column in the Jurassic Tubaaen formation and a 133 meter oil column in the Triassic Fruholmen formation. While the Tubaaen columns had “good reservoir quality,” it was “poorer than expected” in the Fruholmen formation, the Norwegian Petroleum Directorate said today in a statement.

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