Equinor's Barents Sea oil find provides long-awaited boost for Johan Castberg project

London — Norway's state-controlled Equinor has made an oil discovery estimated at 31 million-50 million barrels near its flagship Johan Castberg complex in the Barents Sea, in a potential boost for the industry's expansion goals in the Arctic region, it said March 10.

In a statement, Equinor said the well, some 230 km northwest of the far northern town of Hammerfest, had struck a 109-meter oil section in the early Jurassic age Sto and Nordmela formations, without encountering an expected gas cap.

The announcement, cautiously worded in Equinor's statement, could represent progress in its long search for additional resources in the vicinity of Johan Castberg, a cluster of fields discovered early in the last decade and estimated at 400 million-650 million barrels.

The Norwegian industry's expansion into the Barents Sea has made only halting progress in recent years as a run of exploration success in the early part of the last decade came to a halt. Despite pressure from environmentalists, however, Norway plans to continue producing oil and gas well into the future, while trying to offset emissions through projects such as carbon capture and storage.

"Further development of the discovery toward the planned infrastructure for the Johan Castberg field will be considered at a later stage," Equinor senior vice president for Norwegian exploration Nick Ashton said. "The proven resources may thus generate important additional value and tax revenues for society from the Johan Castberg field."

Equinor has drilled multiple wells in the vicinity of Johan Castberg, as hopes of creating more permanent infrastructure have faltered. The project is due on stream in the fourth quarter 2023, utilizing a floating production, storage and offloading vessel.

Eni revival

However, Italy's Eni, which has a minority stake in the latest find via joint venture Var Energi, struck a more confident note in its own announcement, saying unequivocally the find "will" be tied back to the Johan Castberg complex.

The discovery "confirms Var Energi's successful infrastructure-led exploration strategy in the Barents Sea, proving additional high value barrels for the Johan Castberg project," Eni said.

Eni operates the one currently producing oil field in the Barents Sea, Goliat, via its joint venture Var Energi, although Goliat production has dropped fairly rapidly, to around 40,000 b/d last year. The Italian company faced a barrage of criticism from Norwegian authorities over its handling of the Goliat development in relation to safety and regulatory breaches.

Equinor has said it aims to take a final investment decision on another Barents Sea oil project, Wisting, alongside Austria's OMV, by the end of 2022, taking advantage of temporary tax breaks introduced last year that expire at the end of that year. Wisting represents a further step out in terms of distance from the mainland, and features a number of geological complexities.

On Equinor's overall progress in the Barents Sea, Ashton said: "Succeeding in the Barents Sea requires perseverance and a long-term perspective. This discovery strengthens our belief in the opportunities that exist, not least around the Castberg, Wisting, Snohvit and Goliat areas."