Investment: Statoil Says North Sea Reserves Doubled

Norweign Statoil finds shallow oil that will be cheaper to recover.

Norweign Statoil finds shallow oil that will be cheaper to recover.

The Norwegian corporation Statoil has announced that there are twice the amount of oil reserves in the North Sea field than previously estimated.

The North Sea reserves are newly discovered, and Statoil now reports that the Aldous Major South field contains between 900 million and 1.5 billion barrels of oil that can be obtained.

The field is linked to the Avaldsnes field, which is operated by the Swedish firm Lundin Petroleum.

Giant discovery

These fields are one of the largest-ever discoveries in the North Sea, and brought happy news to investors who have seen the North Sea output decline in recent years.

Tim Dodson, executive vice president for Exploration at Statoil, said the fields were a huge find for the Norwegian continental shelf, and called the Aldous/Avaldsnes fields “a giant.”

Additionally, he said that since much of the discovery is in shallow water, the oil is potentially easier to get to and has much lower risk of environmentally devastating oil spills. Dodson said the value in these fields is “particularly high” because of these factors.

Other partners in the North Sea project are Lundin Petroleum and Petoro, which is a state-owned Norwegian firm.

North Sea output

As older fields were exhausted, the North Sea has seen oil production fall sharply in recent years. While BP statistical bulletin put UK oil production down 7.7% in 2010, Norwegian oil production fell even faster.

Experts say that Norway is unlikely to achieve its previous levels of oil production after the depletion of its old fields. However, the North Sea finds could help reduce the rate of their production decline.

In the UK, new drilling is being concentrated in the deeper waters of the West Shetland area.

A few weeks ago, BP announced a £4.5 billion backing in the Clair Ridge scheme. The company has also revealed a £3 billion redevelopment plan for the Schielhallion and Loyal fields.

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