* Skrugard holds 150-250 mln boe recoverable reserves
* Potential upside for total 500 mln boe
* Most significant off Norway in last decade
* Nearby prospect could also have big potential
* Statoil shares to three-and-a-half-year high
(Adds environmental concern, updates shares)
By Gwladys Fouche and Henrik Stoelen
OSLO, April 1 Norway's Statoil (STL.OL) has made
a big oil find in the Arctic North, the firm said on Friday,
breathing new life into Norway's declining oil prospects and
lifting the company's shares to a 3.5-year high.
The company said the 150-250 million barrels of oil
equivalent Skrugard discovery in the Barents Sea could
potentially hold up to 500 million barrels and is the most
significant off Norway in the last decade. It said a nearby
prospect also looked promising.
"This is fantastic, a breakthrough for us in this section of
the Barents Sea," Gro Gunleiksrud Haatvedt, Statoil's head of
exploration off Norway, told Reuters.
"This find will lead to a new boom in exploration in the
area," said Magnus Smistad, an analyst at Fondsfinans. "This is
an exciting area and the potential could be even bigger."
Statoil shares were up 2.2 percent to 156.7 crowns at 1612
GMT while shares in Italy's Eni (ENI.MI), which has a 30 percent
stake in the licence, were up 1.85 percent to 17.65 euros.
Norway is the world's fifth-largest oil exporter and the
second-largest for gas but its oil output has been declining
since 2001 and oil discoveries have become ever smaller.
In January Norwegian authorities slashed their estimates for
offshore undiscovered oil and gas resources by 21 percent to
16.4 billion barrels of oil equivalent, making the country less
attractive to oil majors -- until today. [ID:nLDE70B1MD]
"This discovery is the missing element needed to develop the
Barents Sea into an oil province over the long-term," Norwegian
Minister of Petroleum and Energy Ola Borten Moe said in a
Finding oil in the Barents Sea has been tough. More than 80
exploration wells have been drilled there since 1980 but only
two discoveries have been made -- Statoil's Snoehvit gas field
and Eni's Goliat oilfield.
Discovered in 2000, Goliat was the biggest oil find made in
the Norwegian Barents Sea until now, with an estimated 240
million barrels in oil equivalent.
The find could lead to renewed concern about the impact of
oil activity in a remote part of the Arctic, following the BP
(BP.L) oil spill in the Gulf of Mexico.
Before drilling on Skrugard began last year, the Norwegian
Polar Institute expressed worries about the potential impact of
oil leaks that could get trapped in the Arctic sea ice, which
extends to within some 150 kilometres (93 miles) north of
Haatvedt said Statoil would drill another well at Skrugard
next year, which is about two-third oil and one-third gas, as
well as another well at a nearby prospect.
"The other prospect has big potential, with a strong
upside," the executive said, declining to offer more details.
The third partner in the license is Norwegian state-owned
firm Petoro, which holds a 20 percent stake.
"It takes between 5 to 10 years from making a discovery to
production, so we are planning for the future now ... "We want
to start production as soon as possible," Statoil said, adding
that it saw possibilities for a stand-alone production
installation for Skrugard.
(Editing by Richard Mably and Jason Neely)