Statoil latest find may be connected to giant field

NORWEGIAN state-controlled energy company Statoil yesterday revealed its latest discovery off the coast of Norway might be linked to the giant Johan Sverdrup oil field found last year

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The new Geitungen prospect, which may contain between 140 million and 270 million barrels, lies just three kilometres north of the major Johan Sverdrup find, which consists of 1.7 billion to 3.3 billion barrels. Statoil said: “Well data indicate there probably is communication between the two discoveries.”

Analysts said that any link between the two discoveries could lower development costs. Handelsbanken analyst Anne Gjoen said: “Johan Sverdrup is a field with very low development and operating costs. Johan Sverdrup is the most positive thing that has happened on the Norwegian continental shelf in almost a decade and then this adds even more to it.”

Christian Yggeset, an analyst at Arctic Securities, added: “If Geitungen and Johan Sverdrup are connected, then it may reduce exploration and production costs. But I do not think it is likely that we are going to see big drops in per barrel costs.”

Production at Johan Sverdrup is expected to start in late 2018.