UPDATE 2-Norway offers exploration licences in Arctic waters

Tue Jun 26, 2012 11:11am BST

Quotes

   

* Norway to offer permits covering 86 blocks

* Most are in the Barents Sea

* High-impact discoveries in Arctic increases interest (Adds Statoil, Det norske)

By Victoria Klesty

OSLO, June 26 (Reuters) - Norway plans to award oil and gas exploration drilling permits in up to 86 blocks next year, mostly in the Arctic region where exploration is booming after recent large discoveries.

The Norwegian Petroleum and Energy Ministry said on Tuesday it was offering 72 blocks in the Barents Sea and 14 blocks in the Norwegian Sea in its 22nd licensing round, scheduled to be completed by the summer of 2013.

"We have seen very strong interest in the Arctic ... and the oil industry is clearly moving north," Minister of Petroleum and Energy Ola Borten Moe said.

The U.S. Geological Survey has estimated the Arctic holds about 13 percent of the world's undiscovered conventional oil and 30 percent of its undiscovered natural gas.

Norway signed a landmark deal in 2010 with Russia that settled a decades-long border dispute and removed a major potential obstacle.

"We are now making preparations to open the southern part of the formerly disputed area, and we hope we can include that in the 23rd licensing round," Moe said.

In January, 37 companies had nominated a total of 228 blocks or parts of blocks in the 22nd licensing round, and 107 of these blocks were nominated by two or more companies, the Norwegian Petroleum Directorate said.

"The interest in exploring in the Barents Sea has increased considerably after Statoil and the licence partners found oil and gas on Skrugard in 2011," said Sissel Eriksen, exploration director in the Norwegian Petroleum Directorate.

Last year's big Arctic discovery, the Skrugard and Havis oilfields, are estimated to hold 400 million to 600 million barrels of oil equivalent.

"This licensing round will contribute to maintaining the activity level in this area and to clarifying the resource potential in the Barents Sea," Eriksen added.

Beyond the energy resources, melting ice is opening Arctic sea passages for longer periods each year, cutting thousands of miles off trade routes between Europe and Asia.

Statoil expects many will fight over the Arctic licences, spokesman Ola Anders Skauby said.

"After the Skrugard and Havis findings, we expect intense competition for areas of interest, and it is therefore essential for us to deliver applications with high quality," he said.

Smaller Norwegian player Det norske, which has a share in the giant Johan Sverdrup discovery in the mature North Sea last year, said the firm was satisfied with the blocks offered in the 22nd licensing round.

"They cover the areas we expected it would cover and we have already acquired data, and work is underway in several areas in the Barents Sea and we will be able to deliver good applications before the deadline," Chief Executive Erik Haugane said.

"The 22nd round is critical to establish a greater diversity in the Barents Sea, which the ministry seems to pave the way for with the announced blocks," he added. (Additional reporting by Camilla Knudsen; editing by Jason Neely and Jane Baird)