Statoil says Geitungen find likely linked to North Sea giant
BY KATARINA GUSTAFSSON
Statoil said monday the Geitungen oil discovery in the Norwegian part of the North Sea is likely linked to the giant Johan Sverdrup find, which gave the Norwegian petroleum sector a welcome shot in the arm last year. Statoil two-thirds owned by the Norwegian state said Geitungen was drilled around three kilometers north of the Johan Sverdrup discovery, and well data indicates there probably is a connection between the two finds.
"A new oil discovery in the Johan Sverdrup area, in the mature part of the North Sea, reinforces Statoil's faith in the exploration potential of the Norwegian continental shelf," Gro Haatvedt, Statoil senior vice president exploration Norway, said in a statement. The Johan Sverdrup find was the world's biggest oil find in 2011 and one of the largest discoveries ever on the Norwegian continental shelf. The find muted concern that Norway's golden age as a major petroleum player is over and spurred both enthusiasm and investments in the Nordic state, which saw its oil output peak in 2001 and had seen a lack of big finds since the 1980s.
The Norwegian company monday said the Geitungen discovery which was made in well 16/2-12 in production license 265 will be included in the continuing development work for the Johan Sverdrup field, which covers both the Statoil-operated production license 265 and production license 501, operated by Sweden's Lundin Petroleum.
Statoil's partner, Det Norske Oljeselskap, had announced August 17 that Geitungen contained oil, but the market was awaiting confirmation from the operator on the size of the discovery. Statoil on Monday estimated the find contains between 140 and 270 mb of recoverable oil equivalent.
"This equals a midpoint of 205 mboe, which is above our assumption of 150 mboe," Swedbank First Securities said in a note.
Statoil owns 40% of Geitungen, while Norwegian state-owned company Petoro holds 30%, Det Norske Oljeselskap holds 20% and Lundin Petroleum holds 10%.
"The discovery supports our view that the Greater Luno Area contains excellent exploration potential and that further discoveries will be made in the region," Lundin Petroleum Chief Executive Ashley Heppenstall said in a statement. For Det Norske Oljeselskap, which is much smaller than Statoil, the Geitungen news is indeed a positive.
"This increases the volumes in license 265 and the Johan Sverdrup area significantly," Det Norske Oljeselskap chief executive Erik Haugane said in a statement. "It also increases the oil resources of Det Norske substantially. For us this is a fantastic discovery." The Johan Sverdrup field has been estimated to contain between 1.7 and 3.3 mboe. Statoil said the company plans to communicate updated volumes for Johan Sverdrup at a later stage.
Dow Jones Newswires