Norwegian companies plan to step up gas production in Arctic areas

Norwegian oil and gas companies plan to focus more attention on deposits in the Barents Sea, in the Arctic. The companies will search for new deposits over the next three years, with further steps depending on any discoveries.

According to Reuters, the Norwegian government awarded a record number of licenses for new wells in the past 5 years on Tuesday, including in areas of the Barents Sea. State-controlled Equinor, along with Aker BP and Vår Energi, secured permits for further exploration.

Equinor currently operates the only gas field at the edge of the Norwegian and Barents seas, the Snøhvit field. Its production is then transported to the Hammerfest LNG terminal, from where it is shipped to market as LNG on tankers.

While companies previously focused mainly on oil production in Arctic areas, they have recently been changing their approach, according to Reuters. After Russian gas supplies fell to a fraction of their previous levels, Norway became the largest supplier of the commodity to the European market. Strong and stable supplies from Norway are therefore crucial for prices in local markets.

"Activity is increasing in the Barents Sea. Together with Vår Energi and Aker BP, we are preparing to explore natural gas resources in the western part of the Barents Sea," Equinor's chief operating officer for Norway, Kjetil Hove, told Reuters.

Any gas discovered will not reach the market for several years

The Hammerfest LNG terminal currently has no spare liquefaction capacity, but according to Hove, Equinor could add a new train. Another option would be to build a new long-distance gas pipeline linking potential fields to the extensive infrastructure in the North Sea. Any decision, he said, would depend on the volume of gas discovered and market conditions.

"We have a new team, new ideas and new areas," Aker BP CEO Karl Johnny Hersvik told Reuters. The volume of gas supplied will depend on the amount discovered, he said, and it could reach the market within 7 years.

Although Norway continues to increase its renewable energy capacity, and local companies are considering investments in nuclear power, the government also plans to continue intensive oil and gas production in the future. Just last summer, the Norwegian government approved investments of 200 billion Norwegian kroner for oil and gas companies, equivalent to roughly 400 billion CZK.