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2011 treaty opens up new areas of exploration offshore Norway

The Norwegian Ministry of Petroleum and Energy is expected to announce the rewards of the 23rd licensing round on the Norwegian continental shelf (NCS) late in the first half of 2016. The 23rd licensing round will include the first new acreage on the NCS offered by Norway since 1994.

The acreage being offered in this round includes the south-east of the Barents Sea, which is an area that was added to Norway’s territorial borders following a treaty with Russia in 2011. The 175,000 square kilometer (67,567 square mile) zone situated north of Russia’s Kola Peninsula and the Norwegian coast was the center of a dispute that started in the 1970s over fishing rights.

According to the Norwegian government, 26 companies submitted applications for new exploration acreage in the most recent round of bidding. The 23rd round included 57 blocks, 54 of which were located in the Barents Sea, while three were in the Norwegian Sea.

Norway, STO, Statoil

Source: Statoil

Statoil looks forward to developing new offshore acreage

While the company will have to wait until the acreage has been officially awarded next year, Statoil (ticker: STO) said it sees potential in the new offshore area.

“The acreage offered is interesting and important and we hope we will earn the opportunity to drill as early as in 2017,” said Jez Averty, senior vice president Exploration Norway. He went on to say that there has been some discussion as to whether or not the resources in place in the 23rd licensing round are economical, but Statoil believes that developing technology will allow it to reduce the breakeven price per barrel, making the area commercially viable.

Companies have been collaborating in order to make exploration off Norway’s coast more economical recently, said Statoil. In the Barents Sea Exploration Collaboration project, 16 companies are cooperating to find common solutions for exploration operations to ensure cost-effectiveness and good safety standards.

Statoil said the new acreage would play a key role in the company’s goals of maintaining production at current levels through 2025 and beyond.

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