Norsk Hydro Finds Oil and Gas in Barents Sea
Date: 01-Mar-07
Country: NORWAY
Author: Wojciech Moskwa
The find, touted by the local press as possibly the biggest oil discovery ever in the Norwegian Arctic, lies northeast from the promising Goliat prospect.
"It is positive that a new, functioning petroleum system has been proven in this part of the Barents Sea," Tore Lilloe-Olsen, head of exploration in the Norwegian sector of Hydro's oil and energy business area, said in a statement.
Norsk Hydro, due to complete the sale of its oil and gas assets to Norwegian peer Statoil later this year, said that the wildcat well was not production tested but that extensive data collection and sampling work was carried out.
"It is important to emphasise that there is a need for further evaluation and analysis of collected data in order to ascertain whether or not the discovery is commercial," Lilloe-Olsen said.
The Norwegian Petroleum Directorate said Transocean's Polar Pioneer semi-submersible rig found hydrocarbons in two various undersea layers and called the results "promising".
Hydro spokesman Christer af Geijerstam said it was not yet clear when, if at all, more drilling would be carried out.
"There might be a new well, there might not. The results are not that secure and further evaluation is needed," he said. "Of course we are optimistic but at the same time realistic."
Norsk Hydro is the operator and has a 30 percent stake in the licence. Its partners are Italy's Eni with 30 percent, Britain's BG with 20 percent and Norway's state-owned Petoro with 20 percent.
Norwegian newspapers, quoting anonymous sources, have said Nucula could have recoverable oil and gas of 300 million to 500 million barrels of oil equivalent -- more than Goliat, which is estimated to hold about 250 million barrels of recoverable oil.
Statoil's Snoehvit gas field, due on stream in late 2007, is so far the only petroleum development in the Barents Sea.
ARCTIC ENVIRONMENT
With many oil and gas fields in the North Sea ageing, Norway hopes to tap the petroleum riches of the Arctic to sustain output. Norway is one of the world's top oil exporters and western Europe's biggest natural gas producer.
But environmental groups say drilling in the Arctic is dangerous and spills could irreparably harm the pristine region. As a result, parts of the vast Arctic region have been closed to exploration activities by the Norwegian authorities.
Seeking to allay such concerns, Hydro said most of the discharge from the drilling was a mixture of fresh water and table salt and that post-drilling evaluations showed little impact on the seabed.
"It is gratifying to see that the operation was carried out with less discharge to the sea than planned, no unforeseen incidents, and with minimal effects on the environment," Lilloe-Olsen said.
Shares in Norsk Hydro were off 2.2 percent at 190.25 crowns, while Statoil was off 1.1 percent at 158.25 crowns, both underperforming the DJ Stoxx Oil and Gas Index, which was off 0.9 percent at 1023 GMT.
The oil directorate said the Polar Pioneer would now be used by Statoil in the Norwegian Sea. The next six-month drilling window in the Barents Sea opens on Sept. 1.