Sweden’s Lundin Petroleum recently announced a discovery of 145 million barrels of crude in the Barents Sea and the find is likely to lead to a renewed push for exploration in the area.
The oil is deposited in Permian rocks, formed some 250 million years ago, and is the first Norwegian discovery of its kind. While the oil industry has left the country and its citizens flush with cash, state-owned Statoil has actually been paring down drilling in the Barents Sea for the past few years.
While no official word from Statoil has been released yet, it is expected that drilling will likely increase going forward. Lundin is dedicating $400-$500 million for Norwegian drilling next year and plans to drill 18 wells, of which 10 will be for exploration.
Continued exploration is worth the effort as the estimated reserves under the Barents Sea are said to be 7.9 billion barrels, though those numbers may now be revised upward. Also encouraging further searching is the fact that this recent find, named the Ghota, lies only about one mile from a previously drilled well that came up dry. In fact, Norway’s largest oil find since 1974, the Johan Sverdrup field holding 3.6 billion barrels, was discovered just ten feet from a previous dry well.
Vienna-based OMV AG also announced a 160 million barrel find in the Barents just days before Lundin’s Ghota find was made public.
“Several players are currently increasing their focus on the Barents Sea,” Teodor Sveen Nilsen, an analyst at Swedbank First Securities, said in a note to clients. “The volumes will probably be commercial” at Gohta, he said.