Norwegian gas exports from the Barents Sea may be two decades away due
to lacking infrastructure, Det Norske Oljeselskap ASA (DETNOR.OS) Chief
Executive Erik Haugane said in an interview, after Norway boosted its
expectations for the area's resources.
This week, oil officials estimated that Norway's part of a
formerly disputed area in the southeastern Barents Sea holds 1.9 billion
barrels of oil equivalent, most of it gas.
"There is an incredibly good potential there," Mr. Haugane
told Dow Jones Newswires on the sidelines of an oil conference Thursday,
adding that his company is interested. "Of course. We have worked with
this area for a long time."
Norway is expected to open the area for oil and gas drilling this summer, following a 2011 delineation deal with Russia. This would be the first new acreage to be opened in Norway since 1994.
The new estimates boosted expectations for the Barents Sea to
become a dominant new oil and gas province. The Barents Sea is now
expected to hold 42% of Norway's undiscovered resources, more than each
of the country's more mature oil provinces, the North Sea and the
Norwegian Sea, the Petroleum Directorate said.
If companies could make four to six discoveries between 500
million barrels and 1 billion barrels in this area, activity in northern
Norway would increase significantly, Mr. Haugane said.
But the Barents Sea is far away from Norway's existing
pipeline infrastructure, and there is still uncertainty about European
gas demand and future gas prices, he added.
"I believe it will still be another 20 years until we see any
gas exports from the Barents Sea," he said. "It just takes time because
these are huge investments that will be repaid over a long period of
time, and you need long-term contracts and a stable long-term gas market
in Europe."
So far, the only Barents Sea field in operation is the Statoil
ASA (STO) operated Snohvit gas field. The field's gas is pipelined to
shore, cooled and exported as liquefied natural gas.
Norway's gas exports are expected to drop sometime after 2020,
unless oil companies make new discoveries or increase the recovery in
existing fields.
Mr. Haugane agreed with Statoil's recent call for clearer signals from Europe that gas will be part of its future energy mix.
"They can't just sit there and lean back and believe that
we'll take the risk that their policies will allow us to build capacity
for the 2020's," he said.
Det Norske has a 20% stake in the Total SA (TOT) operated
Norvarg gas discovery in the Barents Sea, which is expected to contain
up to 315 million barrels of oil equivalent.
Det Norske is also a partner in some of the biggest field
developments in Norway, including Ivar Aasen and the giant Johan
Sverdrup.