Equinor Shifts Focus Away from Southeastern Barents
Norwegian state oil company Equinor, formerly Statoil, has decided to focus its exploration efforts elsewhere after a series of disappointing wells in the southeastern Barents Sea. The frontier region holds some of Norway's most promising offshore geological structures, but exploration was a high-risk, high-potential undertaking. Equinor has decided that the disappointing results it has realized to date do not justify further investment in the area.
“It was always a frontier area, almost a virgin area; we sometimes forget that there was high geological risk on this,” Equinor EVP for exploration Tim Dodson told Bloomberg. “You can say disappointing, but you could also add the words ‘not surprising’ to that.”
Instead, the company plans to refocus its Barents Sea exploration activity on areas near existing discoveries, where the maximum resource potential is less promising but development and production would come at a lower cost. It will also continue longstanding exploration activity on the North Sea Norwegian continental shelf with 20-30 wells next year.
Over the long term, Equinor plans to put considerable effort into exploration off the coast of Brazil, where it is the second-largest oil operator. Its Peregrino field in the Campos Basin holds about 400 million boe in reserves, and the company holds additional promising exploration acreage in the prolific Santos, Campos and Espirito Santo basins.
Equinor is 67 percent owned by the Norwegian state, and it is a contributor to Norway's $1 trillion sovereign wealth fund, the world's largest. Last week, Minister of Petroleum and Energy Kjell-Børge Freiberg told an industry conference in Stavanger that "as long as there is demand for oil and gas in the world, Norway will deliver," acknowledging the climate effects of petroleum combustion. On Tuesday, Greenpeace Norway voiced its objections to these continued E&P plans, citing a new UN report illustrating that the Paris climate goals are not achievable under current global fossil fuel production goals. "The belief in an eternal oil adventure is as unrealistic as Santa," Greenpeace Norway leader Frode Pleym said in a statement.