barents sea

OSLO — While recent Norwegian oil discoveries by Statoil ASA (STO) are exciting, the Norwegian oil sector needs access to new acreage to avoid a substantial production fall after 2020, Statoil Chief Executive Helge Lund said Monday.

Lund revived the call for Norway to open up new acreage where development has been blocked because of environmental concerns.

Statoil announced Monday that its Havis prospect holds between 200 million and 300 million barrels of oil equivalent, a discovery that follows other recent exploration successes. This is an “exciting time” for field developments in the Barents Sea, Lund said Monday in an interview with public broadcaster NRK.

Statoil had drilled around 90 wells in the Barents Sea “without cracking the code”, Lund said. But Lund added that with two substantial Barents Sea discoveries in nine months, Skrugard and Havis, “we now understand the area quite well.”

But even with recent discoveries, Norwegian oil and gas production “will fall substantially between 2020 and 2030 unless we get access to new acreage”, he said, adding that politicians should gradually open up “all new areas” that can secure new production after 2020.

Lund said Statoil has not given up getting access to areas outside of Lofoten in northern Norway, where the Norwegian Government is still gathering environmental information and has yet to approve exploration. There is disagreement within the red-green government coalition on oil exploration, with the socialist party opposing drilling outside of Lofoten because of concerns about the impact to fisheries and worries that an oil spill could mar pristine waters.

The Havis discovery was expected to be significant, and the announced size is “about as expected”, said analyst Kim Evjenth at ABG Sundal Collier, adding the news will probably move the stock a bit higher Monday, maybe by “a krone or two.”

“We think the Statoil share should trade up by NOK1.5-NOK2.0,” Trond Omdal at Arctic Securities added, assuming Havis resources at 250 million barrels valued at $4 per barrel. Arctic has a “buy” recommendation for Statoil with a target price of NOK200.

Assuming Skrugard and Havis hold a total of 500 million barrels of oil, combined production will probably exceed 100,000 barrels a day after 2020, Omdal said. Statoil’s share of 50,000 barrels per day is “giving further support to Statoil’s 2020 production ambition of 2.5 million barrels per day.”

The provisional, updated total volume estimate for Barents Sea discoveries Skrugard and Havis is in the region of 400 million-600 million barrels of recoverable oil equivalents.

Havis and Skrugard both lie within the PL532 licence awarded in 2009. Statoil is operator for the licence with 50% ownership. The licence partners are Eni Norge AS (30%) and Petoro AS (20%).

-By Kjetil Malkenes Hovland, Dow Jones Newswires

Tagged with →  
Share →

Sign up for the gCaptain Newsletter!

Over 19,000 people receive the gCaptain email newsletter every single day. Get the maritime stories that matter sent straight to your inbox. Or LIKE us on Facebook!

We will not share your email address with anybody for any reason