Statoil starts drilling work above Arctic Circle

Norwegian energy company Statoil said it started drilling operations at a field above the Arctic Circle to prepare to rebuild area natural gas stocks.

Statoil said it started drilling an injection well for carbon dioxide injection in the Snohvit field off the northern coast of Hammerfest. A production well will follow in order to replenish gas for an area liquefied natural gas facility.

Injection of CO2, which is contained, is needed to help stimulate well production at the Snohvit field. Statoil said this is the only application of its kind in the world, with 4 million tons of CO2 already stored on site.

"Hammerfest LNG needed replenishment of gas in order to maintain the high production and capacity utilization at the plant, while ensuring sustainable CO2 storage," Geir Owren, a project manager, said in a statement.

Statoil was granted consent by the Petroleum Safety Authority of Norway to operate at the Snohvit natural gas field in the Barents Sea last week.

The Norwegian government confirmed a sizable discovery of oil and natural gas at the Snohvit field in the Barents Sea two years ago at 525 billion cubic feet of recoverable natural gas and more than 130 million barrels of recoverable oil reserves.

The Arctic waters of the Barents Sea hold significant oil and gas reserves, but exploiting those reserves comes with significant risk. While Norway has one of the most advanced offshore drilling programs in the world, the International Energy Agency has said concerns run the gamut from ecological to economic risks.