Oil firms pile in as Norway moves exploration closer to Russia

OSLO (Reuters) - Norway has received applications from 26 oil firms seeking drilling permissions in a licensing round set to move the search for hydrocarbons closer to its border with Russia, the country's Oil and Energy Ministry said on Friday.

Competition for many of the blocks had been fierce, the ministry said, not least in the previously unexplored eastern part of the Barents Sea where Norway settled a 40-year border dispute with Russia in 2010.

Around 55 percent of the oil and gas resources on the Norwegian continental shelf are yet to be produced, and of that 40 percent lie in the Barents Sea, according to an estimate by the country's petroleum directorate.

"It bodes well for the future of petroleum activity in the north that a wide diversity of companies compete for new acreage in the Barents Sea," Oil and Energy Minister Tord Lien said in a statement. The ministry declined further comment on which areas had been most popular.

Applicants in the so-called 23rd round, which is mostly focussed on the Arctic Barents Sea, include Statoil , Shell , Lundin Petroleum , BP and Chevron among others.

Majors who did not apply include ExxonMobil and Total

Russian companies like Lukoil and DEA, owned by Russian billionaire Mikhail Fridman's investment fund LetterOne, also applied. The list included two newcomers to the Norwegian continental shelf - Japan's Inpex <1605.T> and Kuwait Foreign Petroleum Exploration Company (Kufpec).

Norway had invited oil firms to apply for stakes in 57 blocks in previously unexplored areas. Awards are expected in the first half of next year, and drilling could start in 2017, the ministry said.

The Barents Sea is considered a costly area to develop due partly to the lack of infrastructure. Statoil this year delayed a final investment decision on its Arctic Castberg field, one of the world's northernmost oil finds, to cut costs.

Statoil's Snoehvit gas field, in the Barents Sea, is so far Norway's only Arctic offshore field in production. The first oil field is expected to be Eni's Goliat field which is due to start producing oil before the end of 2015. The field was originally scheduled to start in November 2013, but has been delayed several times since. ENI did not apply in the new licensing round.

While Norway frequently hands out additional acreage for drilling, the latest round was the first since 1994 to move into a new geographical area.

(Reporting by Stine Jacobsen and Terje Solsvik, editing by Gwladys Fouche and Susan Thomas)