Aker BP Makes Oil Discovery off Norway

By Gwladys Fouche
Friday, July 12, 2019

Norwegian oil firm Aker BP has made an oil discovery off Norway which could strengthen its hand in negotiations with sometimes partner Equinor on how to develop fields.

Aker BP, formed from a merger of BP's Norwegian oil assets and the Det norske oil firm controlled by billionaire Kjell-Inge Roekke, said on Thursday it had made an oil discovery with its Polish partner LOTOS.

The find is estimated to hold between 80 million and 200 million barrels of recoverable oil equivalent (boe), in an area with several oil and gas discoveries, nicknamed NOAKA.

Up to 700 million boe are in place overall at the discovery, called Liataarnet, but Aker BP needs to do more work to find out how much it can extract, the company said.

Aker BP and its partner in some of the NOAKA fields, state-controlled Equinor, are at odds about how to develop them.

"This is a clear message to partner Equinor in terms of development solutions for NOAKA. We believe the Liataarnet discovery will improve Aker BP's negotiation position vs. Equinor," Sparebank 1 Markets said in a note to clients.

Aker BP shares were up 1% at 0818 GMT, outperforming the STOXX European oil and gas index, which was up 0.3%.

Johan Sverdrup
Aker BP and Equinor are also partners in the Johan Sverdrup oilfield off Norway, which is scheduled to start production in November.

The biggest oil find made off Norway in more than three decades, Sverdrup could start earlier than planned, Aker BP CEO Karl Johnny Hersvik said during an earnings presentation.

"I am really happy about the progress on Johan Sverdrup," he said. "The start-up is going according to plan and we could even start earlier than planned ... We have a couple of deadlines coming up (and will know more then)."

Sverdrup, which is likely to account for 25% of the Nordic country's total petroleum output at its peak in 2022, is co-owned by Lundin Petroleum and Total.

Aker BP also said it would slightly increase its capital and exploration spending this year.

Spending on exploring new oil and gas fields will rise to $550 million this year, from its previous guidance for $500 million. Capital expenditure is now seen in a range of $1.6-$1.7 billion compared with previous guidance for $1.6 billion.

Overall, Aker's net income fell to $62 million in the second quarter from $128 million a year earlier.

(Reporting by Gwladys Fouche; Editing by Mark Potter and David Evans)

Categories: Energy Drilling Activity Europe Oil

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