Lundin energy, one of europes largest independent oil companies, has increased its bet on the arctic by acquiring stakes in several prospects in the norwegian barents sea.
Nick walker, the companys chief operating officer who will become chief executive in january, told the financial times that exploratory drilling starting this month was a key programme for success in the barents sea after several years of disappointing finds.
Lundin on monday said it would pay japans idemitsu kosan $125m to gain exposure to the wisting field, which is due to be developed by norways state oil group equinor by the end of 2022, as well as increase its stake in the smaller alta field.
Alex schneiter, lundins outgoing chief executive, told the ft in july 2019 that lundin had 24-36 months to find something in the norwegian arctic, otherwise it would face pressure from its board and investors to pull out.
Oil companies have withdrawn from large parts of the arctic, with intensifying concerns about the environment and peak oil demand adding to the complexity of extracting resources from remote and inhospitable areas of regions such as greenland and alaska.
Norways barents sea, which lies within the arctic circle, is perhaps the most accessible and explored polar region for oil. however, discoveries have been more modest than hoped, leading to questions over how long companies would continue to explore there.
Norways centre-right government passed a big relief package for the oil industry after the twin shocks of the pandemic and the price crash.
Mr walker said that package had helped with the economics of developing some of the finds in the barents sea.
He added that coronavirus had delayed lundins exploration programme by about six months and that the three wells it would drill in the barents sea this year were relatively high risk but high reward.
We do have to have some material success at some point, mr walker said. we cant keep drilling forever.
The incoming chief executive of lundin the company behind the biggest oil find in norway in recent decades defended the arctic drilling.
Theres been a lot of debate in norway and society about working there, he said. i believe the industry can work responsibly from the barents sea. the reality is that its no different from working in different parts of norway.