Oil exploration in Norway’s Arctic waters will be cut by half this year as state-controlled Statoil ASA (NYSE: STO) halted drilling in the Barents Sea after crude prices plunged, Bloomberg said Feb. 17.
Companies led by Sweden’s Lundin Petroleum AB plan to drill at most seven exploration wells in the Barents Sea, down from a record 13 in 2014, said the Norwegian Petroleum Directorate (NPD).
“We know from experience that some may slide into 2016,” Eldbjoerg Vaage Melberg, an NPD spokeswoman, said by email. Stockholm-based Lundin plans to drill four wells and OMV AG, BASF AG’s unit Wintershall AG and Eni SpA (NYSE: E) one each, she said.
Oil companies from Statoil to Russia’s OAO Rosneft are cutting investment plans, in particular high-cost ventures in areas like the Arctic, after prices fell 60% from June to January. Norway’s Statoil, last year the most active offshore explorer in the Arctic with nine wells in the Barents Sea, said in January that it won’t drill any more in the area this year.
The company, based in Stavanger, might also delay its Johan Castberg project for a third time.
Seven new wells in the Barents Sea would be more than the average 5.6 a year in the past decade, based on NPD figures. It would also set the Norwegian section of the sea, largely ice-free thanks to the Gulf Stream, apart from Arctic areas such as Greenland’s iceberg-ridden west coast. There hasn’t been exploration there since 2011. Statoil in December handed back three Greenland licenses without having drilled a single well.
Royal Dutch Shell Plc (NYSE: RDS-A, RDS-B) hasn’t drilled in Alaska since it ended operations in 2012 after setbacks including a rig being stranded, though it plans to return this year. Rosneft’s plans to explore Russia’s Arctic waters were upended by international sanctions.
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