STATOIL DISAPPOINTED

Norway's biggest energy company, failed to make a commercial discovery in the third and final well in the country's northernmost exploration campaign, adding to other disappointing results in the Arctic Barents Sea.

The Stavanger-based company made a "minor gas discovery" of between 1 billion and 2 billion cubic meters at the Mercury prospect in the Hoop area, the Norwegian Petroleum Directorate said in a statement today.

"We are naturally disappointed," Irene Rummelhoff, Statoil's senior vice president for exploration in Norway, said in a separate statement. "Hoop is a frontier area of more than 15,000 square kilometres with only six wells completed to date, so we do not have all the answers about the subsurface yet. Non-commercial discoveries and dry wells are part of the game in frontier exploration."

Statoil has been struggling to match the success of its breakthrough Skrugard and Havis oil finds in 2011 and 2012, the first commercial discoveries in the Barents Sea in a decade. Those finds renewed the interest of explorers in the Arctic area, thought to contain more than 40 percent of Norway's undiscovered resources.

After having its rig occupied for two days by Greenpeace activists in May, Statoil drilled a dry well at Apollo and made another uncommercial gas find at Atlantis. The company was seeking to find oil in the same area as OMV AG's discovery at Wisting last year and last month at the nearby Hanssen prospect.

Statoil's exploration campaign in the Hoop area follows disappointing results from a five-well program seeking to boost oil volumes for the Johan Castberg project further south in the Barents Sea, which consists of the Skrugard and Havis deposits. Statoil decided in June to again postpone the Castberg development, which had already been put on hold last year amid higher costs, uncertainty about resources and a tax increase.

bloomberg.com