September 13, 2017 / 5:56 AM / 2 months ago

Aker BP plans to drill 6-8 exploration wells in 2018

OSLO (Reuters) - Aker BP AKER.BP plans to drill between six and eight exploration wells off Norway next year, including four in the Barents Sea, the Norwegian oil firm’s chief executive told Reuters.

One of these will target a prospect in the southeast Barents on the maritime border with Russia and could contain significant new resources.

“Yes, it can, but it also (has) quite a bit of risk,” Chief Executive Karl Johnny Hersvik said in an interview at Aker BP’s office near Oslo. “It’s an interesting prospect.”

Aker BP, which is 40 percent owned by Aker Capital (AKER.OL) and 30 percent by BP (BP.L), operates the licence with partners including Russia’s Lukoil (LKOH.MM) and Norway’s Statoil (STL.OL).

Statoil recently completed the highly anticipated Korpfjell well some 100 km further north, but found only a small, non-commercial quantity of gas, contrary to expectations of a multi-million or even a billion-barrels discovery.

“The hype of the Barents Sea was too high... It’s not game over, but it’s worthwhile to cool it a bit,” Hersvik said.

In 2017, Aker BP plans to drill eight exploration wells in Norway, including five partner-operated wells.

Aker’s production outlook for 2017 is 135,000-140,000 barrels of oil equivalents per day, Hersvik said, but said this could be revised depending on a capacity increase at Lundin’s Edvard Grieg field.

Aker BP’s Ivar Aasen field sends oil and gas to the Edvard Grieg platform for further processing and export, and is thus dependent on it capacity.

Hersvik said he expected a “slight decline” in production in 2018 and 2019 compared with 2017, before the start-up of Statoil’s Johan Sverdrup field in late 2019, where Aker BP holds an 11.57 percent stake.

Oil companies have sharply reduced their costs in recent years to compensate for a fall in crude prices but there is still room for cuts, including some at Sverdrup, Hersvik said.

Due to start production in late 2019, the Sverdrup field holds an estimated 2-3 billion barrels of oil equivalents, the largest found off Norway in decades.

Reporting by Nerijus Adomaitis; editing by Terje Solsvik and Jason Neely

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