The area in the eastern Barents Sea, as big as Switzerland, is estimated to hold about 1.9 billion barrels of oil equivalent, of which 15 percent is oil, the Norwegian Petroleum Directorate said earlier.
Norway has wanted to explore in the area for years but a four-decade border dispute with the Soviet Union and then Russia kept energy companies out before the two nations hammered out a landmark settlement in 2010.
Norway is expected to start its next oil and gas licensing round later this year. Wednesday’s vote virtually assures that the east Barents, highly coveted acreage, would be included in the process. Although no date is set for the round, its conclusion is likely to slip into 2015, experts said.
Norway’s vast oil sector has been moving further and further into the Arctic as it runs out of prospects in the North Sea and the government this month awarded 24 licenses to energy firms with 20 of them in the Barents Sea.
A potential complication is that some of the potential oil and gas deposits straddle the maritime border between Russia and Norway, the Petroleum Directorate said.
“There is an obvious political risk there,” Nordea Markets analyst Thina Saltvedt said. “What could happen is that these fields will be left alone for a longer time while oil firms begin with the other fields.”
The risk could be that an oil company working on one side of the border “empties” a reservoir from oil and gas that lie under the other nation’s territory.
Published: December 1, 2023