Norway has made one of its biggest North Sea oil discoveries in a decade, heightening scrutiny on Ed Miliband’s decision to end Britain’s fossil fuel exploration in the area.
Oil field operator Aker BP uncovered a field that could yield the equivalent of 134 million barrels of oil in an area thought to have already been fully explored.
The find was made in the Yggdrasil field, an area of the Norwegian North Sea close and geologically similar to that of the UK sector.
Karl Johnny Hersvik, the chief executive of Aker BP, said it was “amongst the largest commercial discoveries in Norway in a decade” and added he expected further finds as “new exploration methods push the boundaries”.
He said: “We look forward to unlocking even more of the potential in this prolific area.”
The discovery underlines the growing contrast between Norway and the UK in their approaches to oil and gas.
Norway is enjoying continued success in finding and exploiting new oil and gas in the supposedly “mature” North Sea, while Britain is effectively turning its back on the billions of barrels potentially remaining in its own sector.
Figures released separately this week by the Norwegian Offshore Directorate showed that the country’s monthly oil production has jumped to the highest level in over a decade, following the ramp-up of new fields in the northerly Barents Sea.
Meanwhile, around 180 of the UK’s 280 current oil and gas fields are expected to shut down over the next five years, with output predicted to fall 70pc.
Windfall levies imposed by the previous Conservative government and increased by Labour mean UK oil and gas profits are now taxed at 78pc. Mr Miliband, the Energy Secretary, last year banned the issuing of new licences to expand fossil fuel production.
Ashley Kelty, of Panmure Liberum investment bank, said: “Norway’s success is down to a supportive government and a fiscal regime that properly incentivises exploration and development activity.
“In the UK, incessant tax changes have made the UK less stable for investment and the open hostility of governments to longer-term activity has further deterred investment.”
Aker BP’s discovery lies just across the border between the UK and Norwegian sectors and only about 100 miles east of Shetland. It suggests a similar find may lie in British waters.
Mike Tholen, of trade body Offshore Energies UK, said: “Norway is actively exploring and continues to hold annual licensing rounds for new exploration activity.
“Norway is for the most part drilling in similar geological structures to the UK, where oil and gas production in the UK has undoubtedly been severely impacted by policy decisions.”
