Norway to Open First New Oil, Gas Acreage Since 1994

Norway to Open First New Oil, Gas Acreage Since 1994

OSLO - The Norwegian government will propose this week to open the southeastern Barents Sea for oil activity, the Ministry of Petroleum and Energy said Monday, the first new oil acreage in nearly two decades.

The government will present a proposal to the parliament Friday to open the previously disputed Barents Sea area near the Russian border, the ministry said. The three-party coalition government has a parliamentary majority.

"For the first time since 1994, we can now open a new area for petroleum activity and search for oil and gas in new, promising areas," said Minister of Petroleum and Energy Ola Borten Moe, calling it a "historical moment" for Norway.

According to the ministry, the opening process has been ongoing since the spring of 2011. Following 40 years of dispute, Norway and Russia agreed on a delineation deal in 2010. The areas that will be opened for drilling are in the southern part of the previously disputed area.

"The petroleum activity becomes more and more important for northern Norway. There is huge optimism in that part of the country," said Mr. Moe.

In February, the Norwegian Petroleum Directorate presented the results of seismic data gathering in the southeastern Barents Sea. The directorate said the Norwegian part of the area likely held 1.9 billion barrels of oil equivalent, most of it gas and about 15% crude oil. This equals slightly more than a year of Norway's total oil and gas output.

The ministry said those resources equaled about eight fields, which is the size of the Eni SpA operated Goliat oil field currently under development in the Barents Sea.

Copyright (c) 2012 Dow Jones & Company, Inc.


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