Helge Lund, president and chief executive of Norwegian oil company Statoil
Helge Lund, president and chief executive of Norwegian oil company Statoil Reuters

(REUTERS) -- Norwegian oil firm Statoil has made a second big oil discovery in the Barents Sea in less than a year and predicted more discoveries to come in the region, further boosting the remote Arctic region's oil prospects.

The discovery will also improve the oil prospects of Norway, the world's eighth-largest oil exporter and the second-largest for gas, which has seen declining oil output since 2001, following a string of offshore discoveries made over the past year.

The new oil find, called Havis, could hold between 200 million and 300 million barrels of oil equivalent. Together with the previous and nearby discovery in the region, called Skrugard, it could provide between 400 million and 600 million boe, Statoil said on Monday.

This is extremely positive, said John Olaisen, an analyst at Oslo-based firm Carnegie. This is an important strategic asset in a new oil region, so this is very good ... One could expect more oil finds in the region after this.

Finding oil in the Norwegian part of the Barents Sea had until recently proven to be very difficult.

Over the past 30 years oil companies have drilled 92 exploration wells but only a handful have proven to be hits -- Skrugard, Statoil's Snoehvit gas field, Eni's Goliat oilfield and Total's Norvarg discovery.

The analyst said the new oil find could be worth between one and two crowns per Statoil share and that Havis could be even bigger than the oil firm said it was, based on the quality of the oil and gas column found while drilling.

This discovery will help Statoil achieve their 2020 production targets, added Olaisen. Statoil wants to up its total oil and gas output by a third to 2.5 million barrels per day by 2020 compared with its 2010 level.

Statoil expected to strike more black gold in the region around Havis, its chief executive told Reuters.

We believe we now understand (the geology) and have cracked the code in this area, Helge Lund said in an interview. We think we will be able to make additional finds in this license in the future.

He added the aim was for production at Havis to begin before the end of the decade.

The partners in the latest oil find are Statoil (50 percent), Italy's Eni (30 percent) and Norwegian state-owned firm Petoro (20 percent).

Shares in Statoil were up 1.22 percent at 0817 GMT outperforming an European oil and gas index up 0.4 percent. Shares in Eni were up 0.8 percent.


Norway's overall oil and gas production has been declining since 2001 with oil finds becoming ever smaller -- until recently.

Following the discovery of Skrugard in April, Statoil and Sweden's Lundin Petroleum discovered Aldous Major South and Avaldsnes in the North Sea, which together could be the third-largest biggest oil discovery made off Norway, with a potential of up to 3.3 billion boe in reserves.

Norwegian oil production is still expected to decline overall but the recent discoveries are seen slowing the decline.

Havis and Skrugard lie in the same offshore production license in the Barents Sea but the reservoirs are not connected to each other, Statoil said.

Statoil's Lund said the most likely scenario was for a coordinated development of the two discoveries. Earlier this month, the firm said it would use a floating production unit to do the job at Skrugard.

Gross daily oil production at Havis and Skrugard combined could reach 100,000 barrels, said Trond Omdal, an analyst at Oslo-based Arctic Securities.

On a big field like this one, the recovery rate (of hydrocarbons) can be between 50 and 70 percent, so we can expect at least a rate of 50 percent here, he said.