Norway to Drill Untapped Arctic Seas
19 May 2016 - 12:30AM
Dow Jones News
OSLO—Norway's government awarded its first new oil and gas
acreage in more than two decades on Wednesday, allowing drilling in
an area previously disputed with Russia and continuing a push into
the Arctic despite cost challenges and weak profitability in the
sector.
"Today, we are opening a new chapter in the history of the
Norwegian petroleum industry," said Tord Lien, Norway's minister of
petroleum and energy. "For the first time in 20 years, we offer new
acreage for exploration."
Announcing the country's 23rd licensing round in five decades,
the government offered 10 drilling licenses to 13 different
companies, including ConocoPhillips, Chevron, Statoil, and DEA.
Attractive acreage is key to ensure long-term drilling activity, it
said.
"This is a cornerstone of the government's petroleum policy and
is particularly important in the current challenging times for the
industry," the government said.
Three out of the 10 new licenses were awarded in a previously
disputed area with Russia in the southeast Barents Sea, in the wake
of a 2010 delineation deal between the two countries, following
four decades of disagreement.
One of the licenses in the southeast Barents Sea borders Russia,
and will be operated by Det Norske Oljeselskap ASA with a 40%
stake. Russia's Lukoil was offered a 20% stake in the license, and
Statoil ASA (STO) and Petoro were offered similar stakes, the
government said.
Statoil, Norway's dominant oil company and 67%-owned by the
government, was awarded the operating rights on four of the new
licenses. Lundin Petroleum AB was awarded three, while Capricorn
Norge, Centrica PLC and Det Norske Oljeselskap were offered one
each.
"Gradually opening up new areas is crucial for us to maintain
profitable and high-level production up to and beyond 2030," said
Arne Sigve Nylund, Statoil's head of development and production in
Norway.
Sweden's Lundin Petroleum AB said it had been awarded stakes in
five Barents Sea licenses, and estimated that some of the prospects
in the area could have a resource potential of more than a billion
barrels of oil equivalent.
"I am particularly excited about the billion-barrel
prospectivity on the acreage awarded in the southeastern Barents
Sea," said Kristin Faerovik, managing director of Lundin
Norway.
Norway is keen to maintain stable offshore activity as oil
companies are reducing investments amid weak oil prices. The
country has lost 25,000 oil-related jobs between 2013 and 2015, or
11% of its oil-related workforce, according to Statistics
Norway.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com
(END) Dow Jones Newswires
May 18, 2016 10:15 ET (14:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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