Energy Ink

Norway turns to mature areas of North Sea

The discovery of a 'giant' rekindles exploration on the continental shelf

Guest Post

December 14, 2011

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Photo: Kjetil Alsvik / Statoil

Norwegian Prime Minister Jens Stoltenberg was at the South Pole today to commemorate 100 years since explorer and fellow countryman Roald Amundsen became the first person to reach it, beating a rival British crew led by Robert Scott to the mark and bringing an end, some say, to the era of modern terrestrial exploration.

Stoltenberg needn’t have ventured so far to cross an old frontier. A new era of wildcat drilling is sweeping the North Sea following the discovery this past summer of two significant oil fields by Statoil ASA. Expectations for the mature basin were given a jolt after the Stavanger-based firm said this fall that its initial discovery of the two fields – made with Sweden’s Lundin Petroleum and called, respectively, Aldous and Avaldsnes — were in fact part of one “giant” field estimated to contain between 900 million and 1.5 billion barrels of recoverable oil equivalents, revising an earlier estimate that said the Aldous formation alone would yield 400- to 800-million boe.

“There’s a huge interest in Norway” right now, Lars Erik Aamot, head of the oil and gas department at the Ministry of Petroleum and Energy, said in an interview downtown Oslo. 2011 has been a “fantastic” year for exploration.

French major Total SA also said this summer that it had found gas in the Barents Sea, in a region that touches the southern edge of the Arctic circle. More recently, ConocoPhillips this week announced a tentative gas discovery of its own. But it is the Statoil find that has officials here hopeful that a decade-long decline in oil production can be arrested, even as the continental shelf trends more toward production of natural gas.

The giant Aldous-Avaldsnes field is located in one of the first blocks licensed for exploration in the 1960s, stoking optimism that companies will be able to produce similar results by revisiting old haunts with better technology. In a now-familiar pattern that has played out across Western Canada, high oil prices, sophisticated seismic equipment and new drilling techniques have transformed the Norwegian basin into “a totally new play,” Aamot said.

Inevitably, there have been dry holes and disappointments. Deep water exploration off the West Coast has been a let down to date, while commercial development in the Barents Sea has been slow to materialize (the Snohvit or Snow White gas field was discovered in 1984 but only came on stream in 2007, for instance). And it wasn’t until 2000 that Italy’s Eni discovered the nearby Goliat field, the region’s first significant oil play.

A more tantalizing opportunity, perhaps, lies to the east, in an area that had until very recently been the subject of a decades-long territorial dispute with Russia. Seismic work is under way on a thin wedge of the Eastern Barents Sea, not far from large gas discoveries made in the Pechora Sea. “The potential can be huge, but it also can be pretty limited,” Aamot told me. “We need to explore to find out.”

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