Anglo-Dutch oil and gas company Shell has confirmed a Norwegian newspaper report that it has discovered a large gas field in the Norwegian Sea, the Dutch paper, Financiele Dagblad, reported on Wednesday.
The market value of the Gro gas field is reported to be around 160 billion euros (228 billion U.S. dollars). This would mean the recoverable gas reserves are around 1,000 billion cubic meters, according to market experts. This is one of the largest discoveries in recent years.
In response to the Norwegian report, Shell said exploratory drilling will continue until June 20 and will be used to make definitive estimates of the gas reserves. A decision on whether to make an investment will be based on those estimates.
The Gro field is on the same the latitude of the Arctic Circle but has a relatively mild climate. Efforts to recover gas in such remote areas cost billions of dollars, Financiele Dagblad said.
Shell jointly owns the exploration project with Norway's state-owned oil company Statoil. Shell owns 60 percent and Statoil40 percent.
Norway is the formal owner of all reserves that are found in its waters. The state receives the bulk of any revenues. According to a spokesman for Statoil, the tax on oil and gas production is 78 percent. This is a relatively high percentage for expensive projects at sea.
The discovery is a boost for Shell, whose oil and gas production has been declining for years while worldwide demand has been rising steadily. Shell is lagging behind competitors such as Exxon Mobil and BP, which have larger oil and gas reserves.
The Gro field could also be a major boost for the Norwegian energy industry. The country's oil and gas exports have been declining since 2000.
Source: Xinhua
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