Norway Ups Oil, Gas Estimates in Artic Areas by 2.5 Billion Barrels

OSLO - Norwegian oil officials Wednesday boosted the nation's estimate of undiscovered oil and gas by about 2.5 billion barrels of oil equivalent, or 15%, most of it gas in an area formerly disputed with Russia.

The estimates were based on data gathered in the southeastern Barents Sea and around Jan Mayen, where Russia and Iceland have already awarded several licenses.

Norway expects to decide on the opening of the southeastern Barents Sea, as well as Jan Mayen for oil drilling by this summer. Norway hasn't opened any new acreage since 1994.

The Norwegian Petroleum Directorate said the Norwegian part of the formerly disputed southeastern Barents Sea likely held 1.9 billion barrels of oil equivalent, most of it gas and about 15% crude oil. This equals slightly more than a year of Norway's total oil and gas output.

The area of 44,000 square kilometers was delineated in a 2011 deal between Norway and neighboring Russia, after four decades of dispute. The directorate said there were potential oil and gas resources on the border between the two nations. A field crossing the border would have to be shared.

The directorate's minimum estimate for the southeastern Barents Sea was 345 million barrels of undiscovered resources. There was a 5% chance that it could hold as much as 3.6 billion barrels, it said.

The Jan Mayen area was estimated to hold 566 million barrels of oil equivalent, but with higher uncertainty, the directorate said. The estimated upside in this area was 2.9 billion barrels, but there was also a chance that it was completely void of oil and gas, it added.

Russian state oil company Rosneft was recently awarded three production licenses on the Russian side of the formerly disputed area of the Barents Sea.

Norwegian state oil company Petoro AS has a 25% stake in two recently awarded Icelandic production licenses in the Dreki area near Jan Mayen, operated by Faroe Petroleum PLC and Valiant Petroleum PLC.

Copyright (c) 2012 Dow Jones & Company, Inc.

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