Norway’s Aker BP turns its back on new Barents Sea exploration

By Lars Erik Taraldsen on 8/31/2021

OSLO (Bloomberg) --Aker BP ASA, Norway’s second-biggest oil operator, isn’t planning on drilling for more oil and gas in the Arctic Barents Sea.

“The Barents Sea is not an area of focus for Aker BP and we don’t have any concrete plans for further drilling of exploration wells in the area,” Aker BP spokesman Ole Johan Faret said in an email.

Norway, Western Europe’s biggest oil producer, has more than 50% of its recoverable resources still in the ground, according to the Norwegian Petroleum Directorate. The Barents Sea probably holds most of that, yet there’s only one oil field and one gas field currently producing.

Aker BP, which is 40% owned by billionaire Kjell Inge Rokke and 30% by BP Plc, drilled two disappointing wells in the area this summer. One of those hit hydrocarbons, but isn’t considered profitable, Faret said. The company still has some commitments left in its licenses in the Barents Sea, but has no further wells to drill.

After years of excitement about what Norway’s High North might hold, interest has dwindled in recent times. In 2013, as many as 26 companies applied for new acreage when frontier areas for the industry were offered. This year, a similar round attracted just seven. Aker BP was not among the applicants.

With lackluster results from exploration in frontier areas denting interest, general elections on Sept. 13 might also see the Barents fall victim to political necessity. While the biggest parties are keen to maintain the line on oil and gas drilling policy, they are likely going to have depend on the cooperation of smaller parties in order to form a government. A possible coalition between the Labor Party and the Socialist Left may see awards of new acreage in frontier areas scrapped, while exploration in mature areas continues.

That could be a result that the industry could live with. While there will still be interest in the Barents Sea, oil major Equinor ASA has said that its main focus will be around mature areas.

“We do not exclude new areas, but we see that it’s around the mature areas that we’re currently making discoveries,” Anders Opedal, chief executive officer of Equinor, told Bloomberg earlier this summer.

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