Norway plans Barents Sea exploration expansion

Norway plans to persevere with exploration in its arctic frontier through the offer of blocks in the to-now fairly unproductive Barents Sea.

The country's energy and petroleum ministry plans to offer 125 Barents Sea blocks in eight areas in a new licensing round, along with 11 blocks in one Norwegian Sea area.

"Regular access to new exploration acreage is crucial to maintaining activity on the Norwegian continental shelf," energy minister Tina Bru said today. "By initiating the 25th licensing round, while we have the annual allocations in [mature] areas, the oil and gas industry gains access to acreage in both lesser-known and well-known areas."

Norway last week offered 36 new exploration blocks in mature areas of the Norwegian Sea, in its latest annual awards in pre-defined areas (APA) licensing round. That compares with the 69 new licences that were awarded in the previous mature areas round in January — 33 in the North Sea, 23 in the Norwegian Sea and 13 in the Barents Sea.

Exploration results in the Barents Sea, where there is little infrastructure, have been disappointing in recent years. Norwegian state-controlled Equinor is developing the much-delayed 400mn-650mn bl Johan Castberg field in the region. It also operates the Snohvit gas field, the first offshore development in the southern Barents Sea, and holds a stake in Italy's Eni-operated Goliat oil field. Those are the only two producing fields in Norway's Barents Sea.

"The last few months have been particularly challenging, both for oil companies and the supply industry," Bru said. "It is important not to lose sight of the more long-term prospects."

The 25th licensing round will be launched later this year after a consultation period, with awards in the second half of 2021. In the 24th round, Norway awarded 12 licences in 47 offshore blocks to 11 companies in June 2018, despite originally offering 102 blocks or parts of blocks in frontier areas.

By Konstantin Rozhnov