UPDATE 4-Statoil: N.Sea find may be world's biggest in 2011

* Aldous Major South discovery larger than expected -Statoil

* Aldous Major North could hold 100-300 million boe

* Discovery connected to Lundin's Avaldsnes discovery

* Aldous/Avaldsnes may be in top 10 Norway oil discoveries

* Shares in Statoil, Lundin, Det norske rise

(Adds Norwegian Petroleum Ministry comment, updates shares)

By Gwladys Fouche and Joachim Dagenborg

OSLO, Aug 16 (Reuters) - A recent North Sea oil discovery
may be the world's biggest so far this year, Norway's Statoil
said on Tuesday, breathing new life into a mature oil
region largely written off by the majors and lifting its shares.

Statoil said on Aug. 8 it had struck oil in the Aldous Major
South prospect in the North Sea, estimated at between 200
million and 400 million barrels of oil equivalent (boe). It also
said the find might be connected to the Avaldsnes discovery made
by Sweden's Lundin Petroleum .

On Tuesday, Statoil confirmed the two prospects were
connected and estimated their combined size at between 500
million and 1.2 billion of recoverable boe.

"This is probably the biggest oil find (worldwide) in 2011,"
Tim Dodson, Statoil's head of exploration, told reporters.

In June ExxonMobil said it had made three finds in
the Gulf of Mexico totalling 700 million boe, while in April
Statoil made a find in the Barents Sea estimated to hold at
least 150-250 million, with considerable upside.

The latest find will help Statoil achieve its goal of
lifting its annual production by a third to 2.5 million boed by
2020, Dodson said, but would not change its production estimates
for the next few years.

Statoil has struggled with declining oil production in
recent years and has often revised downwards its future
production estimates. Last year it produced 1.89 million boed,
down from 1.96 million in 2009.

"Aldous/Avaldsnes ... may make the top 10 list of NCS
(Norwegian continental shelf) oil discoveries," Dodson said in a
statement. "Norway has not seen a similar oil discovery since
the mid-eighties."

Norway's two biggest ever oil discoveries were Ekofisk and
Statfjord, with more than 3 billion boe each, which were both
made in the 1970s and are still in production.

Statoil said there were strong indications that Aldous Major
South was twice as big as the numbers announced last week, with
estimates now at a potential 400-800 million boe.

There could be more potential in the area, Statoil said,
with a nearby prospect, Aldous Major North, expected to hold
some 100-300 million boe. The firm said it would have more
results from that licence within a month.

Avaldsnes is estimated to hold 100-400 million boe, Lundin
previously said.

Statoil has a 40 percent stake in the Aldous Major South
prospect and a 40 percent stake in the Avaldsnes prospect,
operated by Lundin.

Shares in Statoil rose 2.85 percent, outperforming an Oslo
benchmark index that was down 0.17 percent.

The other partners in the Aldous Major South prospect are
Det norske oljeselskap (20 percent), Lundin (10
percent) and Norwegian state-owned firm Petoro (30 percent).

Det norske shares were up 27.76 percent in Oslo. Lundin
shares were up 13.16 percent in Stockholm, where the benchmark
index was down 1.06 percent.

NEW LIFE IN MATURE OIL REGION

The oil production of Norway, the world's eighth-largest oil
exporter and the second-largest for gas, has been on the decline
for the last decade.

Oil majors such as ConocoPhillips , BP and
ExxonMobil have largely written off the Nordic country
as a significant region for oil and gas exploration, focusing
instead on areas such as the Gulf of Mexico, Brazil or Angola.

The new estimates for Aldous Major South showed the North
Sea remains interesting after four decades of drilling, analysts
said.

"This is incredibly positive. They are doubling the resource
estimate for the latest discovery, and there is also additional
upside both in the Aldous and the Avaldsnes discoveries," said
Handelsbanken analyst Daniel Raavik.

"It shows that the North Sea has more potential than anyone
had thought."

"This is splendid news," said Sissel Eriksen, head of
exploration at the Norwegian Petroleum Directorate, the state
agency in charge of the country's oil and gas resources.

"We are very satisfied: the potential is important. This is
big for the area," she told Reuters, adding that the find, were
it to be in the upper end of the range indicated, could help
slow Norway's production decline, which had been expected to
accelerate rapidly after 2020.

"If that is the case, the decline in production will not be
as steep as we expected it to be. But Norway's production will
not rise again," she said. "Having said that, as we make
discoveries, we find more, so it is early days."

The NPD estimates oil production off Norway will drop to
98.3 million cubic metres this year, down 5.8 percent
year-on-year, and to 88.9 million by 2015.

Statoil's Dodson said it could take six to eight years
before production starts at the new discovery, adding the
recovery rate could be at least 50 percent.

At Avaldsnes, Statoil holds 40 percent, operator Lundin has
40 percent and Denmark's Maersk Oil (MAERSKb.CO) holds 20
percent.
(Additional reporting by Victoria Klesty in Oslo; Editing by
Jane Baird)