Big oil and gas finds in northern Europe

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Norway’s Statoil has made a second big oil discovery in the Barents Sea in less than a year and predicted more discoveries to come in the region.

The new oil find, called Havis, may hold between 200 million and 300 million barrels of oil equivalent (boe). The new find combined with the previous and nearby discovery, Skrugard, could provide between 400 million and 600 million boe, Statoil said yesterday (9 January).

"This is extremely positive," said John Olaisen, an analyst at the Carnegie investment banking firm in Oslo. "This is an important strategic asset in a new oil region, so this is very good … One could expect more oil finds in the region after this."

A Shell and ExxonMobil joint venture, Nam, has also announced what it says is the largest on-shore gas field discovery in the Netherlands since 1995, near Ee, in Friesland.

Production at the South Metslawier site, which is estimated to hold 4 billion cubic metres of reserves, is expected to begin in the summer, and last until 2015. 

The Norwegian find in the Barents Sea, followed a carve-up of the territory in 2010 between Norway and Russia.

The Arctic region holds 25% of the world’s hydrocarbons, according to the US Geological Survey.

Norway is the world's eighth-largest oil exporter and the second-largest for gas. It has seen declining oil output since 2001, but a string of offshore discoveries have been made over the past year.

Finding oil in the Norwegian part of the Barents Sea had until recently proven to be very difficult.

Over the past 30 years oil companies have drilled 92 exploration wells but only a handful have proven to be hits – Skrugard, Statoil's Snoehvit gas field, Eni's Goliat oilfield and Total's Norvarg discovery.

Statoil now expects to strike more oil in the region around Havis."We believe we now understand (the geology) and have cracked the code in this area," the company’s chief executive Helge Lund said.

"We think we will be able to make additional finds in this licence in the future," he said.

Production at Havis is expected to begin before the end of the decade.

The partners in the latest oil find are Statoil (50%), Italy's Eni (30%) and Norwegian state-owned firm Petoro (20%).

The resource-rich Arctic is becoming increasingly contentious as climate change endangers many species of the region's flora and fauna but also makes the region more navigable. Up to 25% of the planet's undiscovered oil and gas could be located there, according to the US Geological Survey.

No country owns the North Pole or the region of the Arctic surrounding it. The surrounding Arctic states of the USA, Canada, Russia, Norway and Denmark (Greenland) have a 200-nautical-mile economic zone around their coasts. 

In August 2007, a Russian icebreaker reached the North Pole and a Russian mini-submarine planted a titanium Russian flag on the seabed there. The move was widely interpreted as a bellicose claim by Russia to the North Pole seabed and its resources. 

Norway covers between 10% and 18% of EU oil demand and about 15% of its natural gas. The country, a member of the European Economic Area since 1994, is the world's third largest exporter of oil and gas after Saudi Arabia and Russia.

By 2015-2020, natural gas deliveries from Norway to the EU are expected to grow from 85 billion cubic metres to 120 bcm, covering 7-9% of the EU's entire gas consumption by 2020.

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