Norway suffers Barents Sea setback as Aker BP well makes only minor gas find

Norway's hopes for exploration success at the eastern flank of its sector of the Barents Sea suffered a setback July 20 with the announcement that Aker BP had made only a minor gas discovery with its first wildcat well in production license 858.

The well was drilled about 160 km south of state-controlled Equinor's Korpfjell gas discovery, with preliminary estimates placing the size of the new find at just 1.6-2.1 Bcm, the Norwegian Petroleum Directorate said July 20.

"The discovery is not considered to be financially profitable at present, but the licensees will assess the discovery alongside remaining prospects in the production license," the NPD said.

Aker BP could not be reached July 20 for immediate additional comment.

The well was the first to be drilled in PL858, which was awarded in Norway's 23rd licensing round in 2016.

Norway has been hopeful that the Barents Sea would contain significant additional reserves to help it maintain production levels as its more mature resource base declines in the coming decades.

However, 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.

Equinor campaign

Equinor carried out a high-profile drilling campaign in 2017 in the Barents Sea -- including Korpfjell which was the first exploration well drilled in the Norwegian section of the formerly disputed area between Norway and Russia -- but the results were mostly disappointing.

Korpfjell was estimated to contain 6-12 Bcm of gas and Equinor said at the time the volume was not large enough for a commercial, stand-alone development.

It had been considered as one of Norway's biggest exploration prospects in decades, with some estimates pointing to potential resources of up to 10 billion barrels of oil equivalent.

It was the fourth well in Equinor's 2017 Barents Sea exploration campaign. Other wells in 2017 included Gemini North, whose recoverable gas reserves were deemed non-commercial, estimated at between 400 million cu m and 1 Bcm of gas, and Blamann, which holds 2-3 Bcm of gas.

The gas from Blamann was expected to provide additional resources for Norway's Hammerfest LNG project.

The main field for supplying gas to Hammerfest -- which is temporarily closed after a fire in September 2020 -- is Snohvit.

Along with Snohvit, the other main producing field in the Barents Sea is the Var Energi-operated Goliat oil field.

However, Equinor plans to bring online its major Johan Castberg field in Q4 2023, located to the north of Goliat and Snohvit, and also made a new oil discovery near the field in March this year.

Equinor has also 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 2022.