Norway energy firms plan three-year push for Arctic gas

(Reuters) - Norwegian oil companies will ramp up exploration for natural gas in the Barents Sea in the next three years, industry executives told Reuters, showing renewed interest in the remote Arctic region after a sharp fall in Russia's gas supplies to Europe.

Norway's government on Tuesday made its biggest award of new drilling licenses in five years, including a crop of Barents Sea permits to state-controlled Equinor, independent Aker BP and Eni subsidiary Vaar Energi.

While companies in the past searched mostly for crude oil when exploring in Norway's Arctic region, which unlike gas does not require long and expensive pipelines or LNG terminals to bring the product to market, they have now changed tack.

"There is a step up in the Barents Sea," Equinor's head of Norwegian operations, Kjetil Hove, told Reuters on the sidelines of an energy conference.

"We are going to explore for natural gas in the western part of the Barents Sea together with Vaar Energi and Aker BP," he said.

Norway replaced Russia as Europe's top natural gas supplier after Moscow's invasion in 2022 of Ukraine, and the hunt is now on in Norwegian waters for more gas reserves.

The three companies won stakes in eight new Barents exploration licenses, of which Equinor will operate four while Aker BP and Vaar will manage two each, but with shared ownership for all three groups.

Equinor operates the Barents Sea's only current gas field, Snoehvit, whose output is liquefied at Norway's Hammerfest LNG plant and exported by tankers. There is no free liquefaction capacity at the facility.

Hove said Equinor could add a new LNG train at the plant or build a long new pipeline linking the Barents to Norway's extensive Norwegian Sea and North Sea gas export infrastructure, depending on volumes found and global gas prices.

He said Equinor expects to know the drilling results in about three years, potentially bringing any new gas to market from the first half of the 2030s.

The license awards were "very important for the further development of the Barents Sea", Energy Minister Terje Aasland told Reuters.

While Norway backs the Paris climate accords and the global goal to transition away from fossil fuels, the country also says the world will need access to oil and gas for many years to come.

Aker BP, Norway's second-largest listed oil company, had previously seen disappointing exploration results in the Barents Sea and announced plans to abandon the area. But the company has had a change of heart, partly as the result of an acquisition.

"We've got a new team, we've got new ideas, we've got new acreage," Aker BP CEO Karl Johnny Hersvik told Reuters.

He said gas export options would depend on how much could be found and that it could take "about seven years" to bring any discoveries to market.

Vaar Energi CEO Nick Walker meanwhile said the company's geologists and other staff were intensifying work to "unlock the hydrocarbon potential in the western Barents Sea".

Related News


{{ error }}
{{ comment.comment.Name }} • {{ comment.timeAgo }}
{{ comment.comment.Text }}