Photo: Harald Pettersen / Statoil

(Dow Jones) The Norwegian government Wednesday announced it will start a geological survey of what oil and gas assets the Northern part of a previously disputed area in the Barents Sea could contain, adding to a previous survey of the Southern part of the area.

Norway last summer started collecting seismic data for the Southern part of the area after the country inked a deal with Russia over a maritime border in the Barents Sea region of the Arctic after 40 years of negotiations.

“The area near the border between Norway and Russia could contain significant oil and gas resources,” Norway prime minister Jens Stoltenberg said in a statement.

“This gives new opportunities for jobs and growth in the North.”

The Norwegian government has initiated an opening process in the Barents Sea with the aim to award exploration licenses in the Southern part, but now also wants to collect data about the Northern part of the area in order to be able to safeguard Norwegian interests in case of cross-border deposits.

In Russia, state oil company Rosneft (ROSN.RS) has received three exploration licenses which cover part of the Russian side of the border.

Norway said its seismic investigation will start this summer and will be up at full speed in 2013. In the Southern part of the Barents Sea, the country started a geological survey in the summer of 2011 which continues this year.

-By Katarina Gustafsson, Dow Jones Newswires

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

Photo (c) BP Plc.

By Katarina Gustafsson and Alexis Flynn

BP PLC’s (BP) efforts to monitor and respond to sudden pollution releases such as oil spills in the Norwegian Sea suffer from “very serious shortcomings” that demand immediate improvement, Norwegian regulators said.

Norway’s Climate and Pollution Agency, a directorate under the Norwegian ministry of the environment, in October 2011 performed an investigation during drilling at the Skarv field in the Norwegian Sea that revealed that BP could not document how they have designed preparedness against sudden pollution releases, the agency said Tuesday.

The report is the latest indication of health and safety issues at BP, which was plagued by a massive oil spill in the U.S. Gulf of Mexico in 2010 and by numerous other accidents in recent years. A BP spokesman had no immediate comment.

“We take this situation very seriously,” Bjorn Bjornstad, director of the agency’s department of control, water and international affairs said in a statement.

The October investigation uncovered deviations that included that BP had not established sufficient systems to detect emergency contamination within three hours. BP also could not prove that its preparations were based on national performance standards, the Norwegian agency said.

“Simply put, they were not good enough,” Bjornstad told Dow Jones Newswires, adding that the agency would impose stricter control on BP during 2012.

BP is now undertaking measures to correct the situation and the agency met with the energy major Friday to discuss the issue. The UK company told the agency what measures it will implement to comply with the regulations. BP will shortly present a written report to the agency on the issue.

The measures concerns both the Skarv field and future BP activities in Norway.

The Norwegian agency also said it is not satisfied with its follow-up of the preparedness for acute pollution when it comes to several other operators on the Norwegian continental shelf. The agency earlier this year had talks with both Norwegian oil and gas major Statoil ASA (STO) and French company Total S.A. (TOT) over the same issue.

-By Katarina Gustafsson, Dow Jones Newswires

“We have a long history there, we have some really strong customer relationships there, and we’ve got some great people there,” Newman told investors on a conference call to discuss the proposed takeover. “And so we wanted to take advantage of an opportunity to grow that first and foremost.”

Transocean said it has offered to buy Aker Drilling for $1.43 billion in a cash deal that would add a pair of harsh-weather drilling rigs–both working under contracts off Norway–to the world’s largest offshore fleet.

Terry Bonno, who heads Transocean’s marketing unit, said those rigs position the company to “take advantage of the new emerging area of the Barents [Sea].”

In the deal, Transocean will also get a pair of ultra-deep-water drillships that are under construction in a Korean shipyard.

In addition to the cash payment–which is equal to 26.50 kroner, or $4.83 per-share–Transocean will assume about $800 million in debt and commit $900 million to complete the under-construction rigs.

Transocean will also gain options to build another two ultra-deep-water drillships for $600 million apiece. The company has until October to decide if it will place those orders, Newman said, adding that the company’s long-standing aversion to building new rigs speculatively remains.

Offshore drillers have spent the last year on a buying spree, ordering dozens of new rigs from Asian shipyards as they race to fill their fleets with rigs that are able to drill in increasingly deeper waters. Transocean, however, has sat out the frenzy.

“As we have consistently said, our greatest objection to building on spec is the fact that excess supply could have a negative impact on day rates and asset utilization,” Newman said.

Newman would not rule out ordering those additional drillships, however. He called the terms, which call for a 25% up-front payment with the remainder due upon delivery, “very attractive.”

Transocean shares recently traded 2.79% higher at $57.16.

-By Ryan Dezember, Dow Jones Newswires

By Katarina Gustafsson

Aiming to supplement its fleet in the arctic, American drilling giant Transocean Ltd. said it plans to acquire Norwegian drilling-rig operator Aker Drilling ASA for $1.43 billion in cash.

Under the transaction, Transocean, which owned the rig at the center of last year’s catastrophic Gulf of Mexico oil spill, has made a voluntary 26.50 kroner ($4.83USD) per-share cash offer for all outstanding shares in the company.

Transocean said early Monday that Aker Capital AS, a wholly owned subsidiary of majority holder Aker ASA, and other existing shareholders of Aker Drilling representing 60.5% of the outstanding shares, have committed to sell their shares to Transocean. A subsequent Aker news release later Monday said Transocean had acquired 8.7% of issued shares and has irrevocable acceptances for 67.6% of Aker’s shares.

The offer price represents a 62% premium to Aker Drilling’s 30-day average price of 16.39 kroner a share, Transocean said. The transaction will be funded using existing cash balances and debt facilities. Transocean is also assuming $800 million in Aker Drilling’s debt, lifting the total value of the deal to $2.23 billion.

Transocean said the Aker Drilling acquisition would contribute about $1 billion in contract backlog and would be “immediately accretive” to its earnings. Aker operates two of the world’s most advanced deepwater drilling units and has two other ultra-deepwater drill ships under construction in South Korea.

Transocean’s most recent earnings plummeted 78% following lower utilization of its drilling fleet. The company continues to spar with BP PLC in the aftermath of last year’s Deepwater Horizon disaster, which killed 11 people and produced a massive oil spill. The accident has spurred lawsuits.

Transocean Chief Executive Steven Newman notes the Aker assets would “enhance our place in Norway where we have enjoyed a long-term presence.”

Aker Chief Executive Øyvind Eriksen said the company looked at “several alternatives featuring interesting market participation” in anticipation of possible consolidation, but picked Transocean because the cash offer was “good for Aker Drilling and all shareholders.”

The Transocean acquisition gave a boost Monday to oil-services companies, especially to other drillers that could become acquisition targets.

“It’s positive that the world’s largest drilling company has such a positive view on the drilling market that they are prepared to do buys,” said analyst Kjetil Garstad at Arctic Securities.

Mr. Garstad said shallow-water jack-up rigs could be next in line to be acquired, mentioning companies like Standard Drilling PLC and Prospector Offshore Drilling S.A. Standard Drilling shares were up 7% to 5.35 kroner Monday. Prospector jumped 11.6% to 8.15 kroner during early afternoon trade.

Morgan Stanley and Fearnley Fonds/Fearnley Offshore are acting as financial advisers to Transocean Services and Wikborg Rein is acting as legal adviser to Transocean Services.

Shares in Aker Drilling on Monday shot up 95% to 26 kroner following news of the offer.

Gustav Sandstrom contributed to this article.

Dow Jones & Company, Inc.

Image (c) ØYVIND SÆTRE

Nor-shipping 2011, one of the premier events for the European maritime industry, is kicking off this week in Oslo, Norway.  This years show dares to ask the question ‘What’s next?‘ and the conferences May 24 and 25 will explore the theme from a number of different perspectives.  So what is next?  Well, the major themes leading up to this years show has been the shipping industries push to offshore oil and gas and social media.

Nor-Shipping 2011 will be hosting its first-ever Offshore Agenda conference to highlight the growing demand from the offshore oil and gas industry.  Specifically, the conference is marking Brazil’s importance as a hotspot for offshore service providers with Petrobas’ CEO José Sergio Gabrielli delivering the keynote address and officially marking Day Two of the conference ‘Brazilian Day’.  The conferences will also  feature presentations by top industry leaders such as Tor Olav Trøim of Frontline, Peter Evensen from Teekay Corp, Peter Anker of RS Platou, Cecilie Fredriksen with Frontline, Thomas Wilhelmsen of Wilh. Wilhelmsen, Roy Reite from STX OSV and Karl Johan Bakken of Farstad Shipping ASA to name few.

Embracing social media, Nor-Shipping has launched an official twitter page and an interctive “ebook” to compliment the show and has already received praise for their digital strategy by ShipServ, a company that has proved itself forerunner in the maritime industries push online.  The new website, NextGenerationShipping.com, was launched in January as a platform for discussion leading up to Nor-Shipping.  The website is a callaborative effort  from companies such as ABB, DNV, Kongsberg, Jotun, Wilhelmsen, Wartsila, and Ulstein among others.  You can also follow the show by using #Norshipping hashtag on Twitter.

With everything going on, hopefully by the end of the week the shipping industry will have a clearer answer to the question “what’s next?.”  Keep checking back to gCaptain for updates on the show.

This contract covers engineering, procurement, welding and installation of flowlines, including a 19.5 kilometer pipe-in-pipe production flowline, a plastic-lined water injection flowline and a gas lift flowline of the same length, subsea equipment installation, and installation and tie-ins of new risers and umbilicals.

Technip’s operating center in Oslo, Norway will execute the contract. Flowline welding will take place in the Group’s spoolbase in Orkanger, Norway, while installation will be performed by the Apache II, a pipelay vessel from Technip fleet, in mid-2012.

The contract is subject to approval of the plan for development and operation of Gygrid by the Norwegian authorities.

Source: Technip

The offers were submitted after the authorities had evaluated applications from 41 companies in the Awards in Pre-defined Areas (APA) 2010.

Of the 50 production licences, 31 are located in the North Sea, 17 in the Norwegian Sea and two in the Barents Sea. Eighteen of the production licences are additional acreage for existing production licences. Seven of these are adjacent to discoveries/fields. Six of the new licences are divided stratigraphically and only apply to levels below/above a defined stratigraphic boundary.

Of the companies that applied, 39 will be offered interests in at least one production licence. Twenty-two of the companies will be offered operatorships. Two of these, Edison International and Spring Energy, have not previously been operators on the Norwegian shelf.

”The emergence of new operators is satisfying. It shows that the companies are developing and the number of players is increasing. It is important to explore the mature areas on the shelf thoroughly,” says exploration director Sissel Eriksen in the Norwegian Petroleum Directorate.

The offers are subject to obligations stipulated by the authorities. There is a requirement for acquisition of new seismic data in six areas and three fixed wells are to be drilled: Two in the North Sea (Statoil and Talisman) and one in the Norwegian Sea (Wintershall). For the other production licences there are ”drill or drop” conditions. This means that the licensees have from one to three years in which to make a decision to drill a well. If they do not wish to do so, the production licence lapses.

APA 2010 was announced on 19 February 2010. Up until the deadline of 15 September 2010, the companies could apply for area totalling 84,854 square kilometres divided into 306 blocks. This was 30,000 square kilometres more than at the application deadline the year before. The increase is due both to areas relinquished during the course of the year and an expansion of the area covered by the APA scheme.

Since the first APA round in 2003, the APA acreage has been expanded several times and for the APA 2010 comprised a total of 162,826 square kilometres. This was an increase of 22,600 square kilometres from the year before.

Sissel Eriksen is very satisfied with the results of the APA scheme. She states that it contributes to mature areas on the Norwegian shelf being explored more thoroughly and quickly. New players with new ideas and new exploration goals have yielded more new discoveries in old areas. Discoveries have been made in about 40 per cent of the more than 60 wells that have been drilled in production licences awarded under the APA scheme, and more than 180 million standard cubic metres of recoverable oil equivalents have been proven to date.

The scheme also ensures that the industry secures regular access to exploration acreage and that acreage is relinquished more quickly. Nearly 100 previously awarded APA licences have been relinquished, thus making the acreage available for new players.

Source/Image Source: NPD

by Øystein Ellingsen

Shipspotter VOX tells us: The Norwegian car ferry Bergensfjord was enroute Bergen – Hanstholm early last week when she enouctered 8 meter waves. 2 trailers were overturned.