norway: drillers hit record dry spell as reserves wane...,

Bloomberg | Statoil ASA (STL) and Eni SpA (ENI) are among companies with plans to drill a record number of wells in Norway’s far north this year to help the world’s second-largest gas exporter to sustain output. So far, they’ve struck out.

All four wells drilled in the Barents and Norwegian seas this year have failed to find oil or gas, adding to two dry wells in the North Sea, the biggest number of failures to start the year since the country’s oil era began in 1966, according to government data. Oil companies plan as many as 22 wells in Norway’s Arctic this year, up from 12 last year.

Helge Lund, chief executive officer at state-controlled oil company Statoil, says the industry has been unable to “crack the code” of the Barents Sea, off Scandinavia’s northern tip. Norway, where energy production makes up about 25 percent of the economy, is pushing into the Arctic and relying more on gas because oil output has slumped 50 percent since peaking in 2000.

The Barents Sea “is extremely important for Norwegian oil production given that the mature areas are in extreme decline,” said Torbjoern Kjus, an analyst at DnB NOR ASA in Oslo. “Every dry well is a setback, but we have to keep trying where there might be resources left if we’re going to maintain Norwegian production going for as long as possible.”