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Norway grants 24 oil licenses in Arctic-focused round


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Wed Jun 12, 2013 6:16am EDT

* 24 licenses awarded to 29 companies

* Statoil, Shell, Conoco, Total, ENI among winners

* 36 oil firms had applied, 86 blocks were on offer

OSLO, June 12 (Reuters) – Norway awarded 24 oil and gas exploration licences on Wednesday, focusing on the Arctic Barents Sea, in an effort to prolong oil output after more than a decade of decline.

Statoil, ConocoPhillips, Shell, Total, ENI and nine other firms received the right to operate licences, while a total of 29 firms won stakes in licences.

The Nordic nation, which lifted its undiscovered resource estimate to 18.7 billion barrels of oil equivalent (boe) earlier this year, is seeing a decline in its current oil output and is looking northwards to rejuvenate it.

Interest in the Nordic country’s Arctic offshore rose after Statoil discovered the Johan Castberg field in the Barents Sea two years ago. Until then, close to 100 exploration wells had been drilled over three decades, with the vast majority coming up dry.

Major firms that applied for licences but did not get any, include BG, Denmark’s DONG and Dana Petroleum. Lukoil and Rosneft both received stakes in licences, becoming the first Russian companies to hold stakes in Norway.

Norway offered 86 blocks, or partial blocks, in the round, of which a record 72 were in the Barents Sea and 14 in the Norwegian Sea.

Statoil and ENI both won three operatorships, while others got one or two. Statoil also received stakes in seven licences. Austrian firm OMV won stakes in six licences, including two operatorships.

“Interest has been great and firms submitted great applications, confirming that the Norwegian Continental Shelf is a very interesting petroleum province,” oil minister Ola Borten Moe said in a statement.

Norway has some of the highest taxes in the world for its oil sector, but the regulatory regime favours exploration. Unlike many major producers, it does not sell licences but awards them to the best applicants and refunds 78 percent of drilling costs.

It also allows firms to write off much of their development costs and recoups tax money once fields go into production.

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