Oil firm Statoil is looking to a rebound in exploration activity offshore Norway in the next few years with a focus on the Arctic, having curbed activity due to the oil price slump, the firm's exploration chief for Norway told Reuters.
Exploration activity in the coming years is crucial to secure Statoil's future production in its home base, which faces a decline from current levels after 2025 if mature fields are not replaced by new resources. It can take up to 15 years from discovery to a field to come on stream.
Asked whether a drop in exploration levels in Norway this year would be permanent, Jez Averty, Statoil's head of exploration for Britain and Norway said: "We believe that it is lower (this year) than in the years to come."
"We're looking to the 23rd round to trigger an uptick in activity for us," he said on the sidelines of an oil conference.
The so-called 23rd round is an Arctic-focused oil licensing round, set to open unexplored acreage in the Barents Sea
in the Arctic, closer to the country's border with Russia. The awards are expected to be announced before July.
"This gives us the opportunity to chase larger discoveries, all be it at a higher geological risk," Averty said, adding that such discoveries were absolutely necessary if Statoil is to preserve production at today's levels until 2030.
Around half of the undiscovered resources offshore Norway lie in the Barents Sea. But a 62 percent drop in crude prices since mid-2014 has put a break on activities in the Arctic, where it is more costly to develop projects, mainly due to the lack of infrastructure.
"We have struggled to commercialize the discoveries that have been made (in the Barents Sea)," Averty said.
On Tuesday Statoil presented a new set of technologies tailored for the Barents Sea, known as Cap-X, designed to reduce costs and increase the efficiency of subsea developments.
"One of the accusations that has been used against opening up the Barents recently is that it will never be economic. This (Cap-X) is very important in ensuring that it can be economic," Averty said.
However, not everyone sees the same possibilities as Statoil. Shell withdrew its application from the 23rd licensing round earlier this month, while other majors such as ExxonMobil
, Eni and Total did not apply, partly because they are searching for larger discoveries in other parts of the world.
"We have to bet on the business opportunities which give quicker revenues than a discovery in the Barents Sea," Shell's head of activities in Norway told the conference on Tuesday.
(By Stine Jacobsen; Editing by David Evans)