October 18, 2011 / 10:46 AM / 8 years ago

UPDATE 2-Statoil to unveil size of giant oil find soon

* Statoil says appraisal well at Aldous Major South successful

* Some analysts upgrade find’s size after news

* N.Sea find could be 3rd biggest ever made off Norway (Adds analysts, detail, updates shares)

By Gwladys Fouche and Henrik Stolen

OSLO, Oct 18 (Reuters) - Norway’s Statoil said a major oil find, described as a “giant” by a partner last month and seen as giving new life to fading North Sea output, was significant and it would aim to give a more precise estimate of the size within a couple of weeks.

Statoil said that an appraisal well in its Aldous Major South structure showed a “significant” amount of oil.

The discovery has revived prospects for the North Sea, a mature oil region largely written off by the oil majors as a promising area for new exploration.

Oil minnow Lundin Petroleum said last month that Avaldsnes/Aldous Major South, which could already be the biggest oil find made so far this year, may hold 1.2 billion to 2.6 billion barrels of oil equivalent (boe).

At 2.6 billion barrels, it would be the third-largest made on the Norwegian shelf, surpassed only by the Statfjord and Ekofisk fields which kicked off Norway’s oil era in the 1970s, each field with more than 3 billion barrels.

Statoil, one of Lundin’s partners in the find, declined at the time to confirm the Swedish company’s estimates, saying that it had to make more analysis of its own.

So far, Statoil believes Aldous Major South on its own may hold between 400 million and 800 million boe. On Tuesday it said the appraisal well at Aldous Major South was promising.

“Discoveries are always positive, and this is a significant oil column,” Statoil spokesman Ola Anders Skauby told Reuters, adding that the company hoped to have a volume estimate for the find within “a couple of weeks”.

The firm said that an appraisal well drilled at the site proved an oil column of 50-55 metres (164-180 feet).

Some analysts upgraded their estimates of the discovery’s reserves after the news.

“Based on today’s announcement from Statoil, we have increased our mid-point volume for Aldous (Major South) from 600 million barrels to 850 million barrels,” DnB NOR markets analyst Espen Hennie wrote in a note to clients.

Hennie now estimates Aldous could contain as much as 1,400 million barrels. “We think the risk is predominantly skewed to the upside relative to the current market expectations,” he wrote.

Another analyst, who did not provide updated figures, said the find could be even bigger than thought.

“It looks like the volumes will be in the higher end of the range Statoil provided, and maybe over,” said Teodor Sveen Nilsen, an analyst at First Securities.

“It certainly confirms that there is a lot of oil there,” he said.

Statoil shares were trading 0.44 percent higher at 1216 GMT on an Oslo bourse whose main index was down 0.3 percent.

Shares in Det norske , which has a stake in Aldous Major South, were up 7.5 percent while Lundin shares were up 5.3 percent.


Avaldsnes, which is connected to Aldous Major South even though it lies in a different production licence, is estimated to hold between 800 million and 1.8 billion boe, according to Lundin, up from 100 million to 400 million it previously saw.

By comparison, Buzzard, Britain’s largest oilfield which feeds into the benchmark UK Forties crude oil production stream, was found 10 years ago with reserves of around 500 million boe.

The biggest new UK oilfield now in the news, which BP has just announced it will be developing off the west of Shetland, is the 640 million-barrel Clair Ridge oilfield.

On average over the last 10 years, new oilfields discovered in the UK sector of the North Sea have contained only around 20 million barrels.

Avaldsnes/Aldous Major South could make up a fifth of Norway’s oil supply from 2020, rising to over half by 2027, consultancy Wood Mackenzie said earlier this month.

Lundin expects production to start in 2017 while Statoil believes it will more likely be in 2017-2018. .

The Norwegian Petroleum Directorate (NPD), which manages Norway’s oil and gas resources, has been more cautious, however, suggesting it could be in 2018-2019 before the field can produce.

The NPD, like Statoil, has not confirmed Lundin’s numbers as it carries out more analysis on the size of the find, although it does believe that the find is undoubtedly large.

It expects to book the discovery in Norway’s overall resource estimates early next year.

Norway is the world’s eighth-largest oil exporter and the second largest for gas. Oil production peaked in 2001 and has fallen since. In 2010 the Nordic country produced 1.8 million barrels per day.

Lundin is the operator of Avaldsnes with a 40 percent interest. Statoil has a 40 percent interest, and Maersk Oil, a unit of Danish shipping giant Maersk (MAERSKb.CO), has a 20 percent interest.

Statoil is the operator of Aldous Major South and has a 40 percent stake. The other partners are Det norske oljeselskap with 20 percent, Lundin with 10 percent and Norwegian state-owned firm Petoro with 30 percent. (Editing by William Hardy)

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