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Shell Says Oil, Gas Resources Off the Coast of Norway Remain Considerable

Bloomberg

By Marianne Stigset – Sep 7, 2010

Royal Dutch Shell Plc said undiscovered petroleum resources in Norwegian waters remain “considerable” after Europe’s largest oil company had a disappointing well offshore the Nordic country.

“The exploration potential in Norway and the scale of the areas involved and the proximities to markets is very, very great,” David Loughman, head of Shell in Norway, said today in an interview in Oslo. “People talk a lot about unconventional gas, but the undiscovered potential in Norway remains considerable. The question is all about access to those areas.”

Shell has suffered setbacks this year in Norway, including a 24 percent cut in the estimated reserves at its Ormen Lange gas field, Europe’s third largest. Last month, the company’s appraisal well at the Gro gas discovery in the Norwegian Sea found that the resources may be in the lower end of the 10 billion to 100 billion cubic meters estimates, according to the Norwegian Petroleum Directorate.

“The Gro feature is very large,” Loughman said. “We’ve proven gas in it and what we need now is to find a way of developing a model for better reservoir quality in the structure somewhere. There’s still a lot of work to do.”

Norway, the world’s second-biggest gas exporter, is seeking to develop a center for production in the Norwegian Sea that also includes finds by Statoil ASA and Total SA. The country is seeking to raise gas production as North Sea oil fields are depleted after 40 years of output.

Loughman said it was “too early to say” how the results from Gro would affect overall interest in the area and whether it meant that Statoil’s Luva discovery was likely to become the focus of the area rather than Gro.

“Gassco is leading the evaluation of all the options at the moment,” he said. Shell has moved the Aker Barents rig to start drilling at the nearby Dalsnuten and results from that drilling may come by the end of year, Loughman said.

Shell will maintain its “historically high” investment in Norway “broadly flat” next year, Loughman said, declining to specify the amount. It aims to participate in the country’s 21st licensing round that was announced this year, he said.

To contact the reporters on this story: Marianne Stigset in Oslo at [email protected]

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