Lundin starts new Barents drilling campaign

July 16, 2013 at 8:10 AM   |   Comments

STOCKHOLM, Sweden, July 16 (UPI) -- Swedish energy company Lundin Petroleum said Tuesday it started drilling off Norway in an area thought to contain 108 million barrels of oil equivalent.

Lundin said it started drilling an exploration well in the Gohta prospect nearly 90 miles off the Norwegian coast in the Barents Sea. The company estimates the Gohta prospect contains 108 million barrels of oil equivalent.

Drilling in the deep Norwegian waters is expected to last 45 days.

Lundin added Tuesday, however, it was no longer able to support some of its natural gas developments off Norway because of the perceived value of the assets.

"In view of the recently announced Norwegian tax changes, which particularly impact marginal discoveries, we feel it is prudent to write down the carrying value of these assets," Lundin's President Ashley Heppenstall said in a statement.

The company said, however, its exploration expenses in Norway would be offset by a tax credit.

Norway is a regional leader in terms of oil and natural gas production. The government last week gave Lundin approval to conduct exploratory drilling in the central waters of the North Sea using a mobile drilling platform.

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