More Oil Found in Norwegian Water of North Sea

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Norwegian energy company Var Energi (Stavanger) made a discovery in the nation's territorial waters of the North Sea, its first for exploration wells awarded in 2018.

The Norwegian Offshore Directorate (NOD), the nation's energy regulator, confirmed that Var Energi found oil in three wells of the Ringhorne Nord prospect, located in the North Sea some 125 miles northwest from the port city of Stavanger.

The government estimated the reserve total was somewhere between 13 million and 23 million barrels of recoverable oil equivalent. These wells - 25/8-23 S and 25/8-23 A & B - were the first exploration wells drilled in an area awarded in 2018.

"The discovery proves that there are still opportunities in the mature areas on the Norwegian Continental Shelf, and I'm glad to see that our near-field exploration strategy is paying off," said Torger Rod, the company's chief operating officer.

Norway's second-largest exporter of oil and gas, Var Energi aims to double its production rate from 2023 to around 400,000 barrels of oil equivalent per day (Boe/d) by the end of 2025. The company is trying to reduce unit production costs from the $14 per barrel of oil equivalent reported for 2023.

In announcing its latest North Sea discovery, the company said it's had a 50% success rate at its exploration wells, with costs of less than $1 per barrel of oil equivalent over the last five years.

Though production is low relative to the likes of the United States, Norway is a key oil and gas supplier to the European economy. The government reported total production for February, the last full month for which data are available, at 1.78 million barrels per day (BBL/d), around 3% more than expected, but 2.6% lower than January. Though regional markets are bloated, gas production dropped in both January and February on the Norwegian shelf.

The NOD said it expects production offshore will peak as early as 2025, but it believes there's untapped potential in its territorial waters. The Barents Sea, for instance, could keep production levels sustainable should recent studies on how to expand the regional export capacity yield promising results.

The government expects to see at least eight new exploration wells tapped in the region this year.

"It took a lot of good decisions to get where we are today in the Barents Sea, and we now have the opportunity to lay a good foundation for further development of this part of the Norwegian shelf," NOD General Director Torgeir Stordal said.

Regional production is also low carbon, with as much as 40% of the offshore installations targeted for electrification. Emissions of carbon dioxide from production average 15 pounds per barrel, relative to a global average of about 37 pounds.

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