UPDATE 1-Total says Norvarg Arctic field not commercially viable

Wed Nov 20, 2013 7:26am EST
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* Gas field was key in reviving interest in Norwegian Arctic

* Resource view is half earlier view of 10-50 bln cubic metres

* Sees potential for up to 100 mln boe at N.Sea prospect

By Gwladys Fouche

STAVANGER, Norway, Nov 20 (Reuters) - French energy firm Total said on Wednesday development of the Norvarg gas field in Arctic Norway was not commercially viable, another signal that oil firms are reining in their optimism about the Arctic.

Norvarg was one of the two discoveries together with Statoil's Johan Castberg in 2011 to revive interest in the Norwegian side of the Barents Sea. They helped rejuvenate the prospects of Norway as an oil and gas producer.

The announcement on Wednesday underlines the challenges of developing oil and gas in the remote region. Statoil in June suspended the $15.5 billion Castberg project as it hopes to find more resources to make the project economically viable.

"The problem we have on Norvarg is productivity," Martin Tiffen, managing director of Total Norway in an interview.

A well drilled recently at the Norvarg field flowed at a rate of just under 200,000 cubic metres a day, he said.   Continued...