Russia's second biggest oil company has two licenses in the Norwegian part of the Barents Sea. Photo: Lukoil.ru

Lukoil mulls expansion in Barents Sea

But the company might still decide to exit one of its Norwegian licenses in the area.
November 28, 2016

Lukoil Vice President Ilya Mandrik confirms to Kommersant that his company considers to exit license «Ørnen» (PL708) in the Barents Sea. 

«A positive economy [in the license] is not evident», he says. The statement comes after the license consortium late 2015 failed to make a major discovery in the area.

Production licence 708 is located off the coast of Finnmark county, about 85 km north-east of Berlevåg, in the eastern sector of Norway’s Barents Sea.

According to Mandrik, one of the other five companies in the consortium has already signaled that it wants out. The license is controlled by Lundin (40%) in cooperation with Lukoil (20%), Edison Norge (20%), Lime Petroleum Norway (10%) and North Energy (10%).

«It is not clear whether this joint venture will be preserved», the company representative told journalists.

Meanwhile, the Russian oil company leader highlights his intention to place the bets on a second license in the area. The PL858 is the easternmost on the Norwegian shelf, located directly along the border to Russia. 

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«There, we are expecting real efficiency and result», says Mandrik. The production license is operated by a partnership of Det Norske (40%), Lukoil (20%), Statoil (20%) and SDØE (20%).

Lukoil President Vagit Alekperov told Kommersant that a first well in the license is planned drilled late 2017, alternatively early 2018. He also highlighted that the company «considers a further strengthening of its presence in the region».

Lukoil representatives earlier told the Barents Observer that «the offered participation in the license for exploration and production at the Fedynsky High [PL858], at the territory which Russia and Norway were pacing to finally reach the agreement on for 30 years, is a confirmation of international recognition of LUKOIL’s unique experience obtained at Caspian, Barents, Baltic, Black sea and African fields». 

The license is located in the previously disputed waters between Norway and Russia and was awarded as part of the 23rd Norwegian license round.

«LUKOIL was the first Russian oil company pre-qualified in 2011 as an operator on the Norwegian Continental Shelf and became the only Russian company, which was granted a participation in the new project within 23rd Round. We believe the Company’s knowledge and experience provide competitive advantages both for Russian and Norwegian Shelf», the company underlines.

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