OSLO (Reuters) - Norway's Statoil (OSL:STL) found only natural gas and no oil at the Ice Crystal prospect in the Arctic Barents Sea, the company and the Norwegian Petroleum Directorate said on Monday.
"Our main goal was to find oil ... but unfortunately it did not materialize. We still believe we can prove more oil resources in the Johan Castberg area and will continue our exploration effort with two more wells," said Gro Haatvedt, senior vice president for exploration in Norway.
The discovery probably contains gas equal to between 6 million and 25 million barrels of oil equivalent, Statoil added.
"The well encountered a gross gas column of about 200 metres in the Stoe and Nordmela formations, with poorer reservoir quality than expected in both formations at the well position," the Petroleum Directorate said in a separate statement.
Ice Crystal has been one of Statoil's most closely watched wells because of its close proximity to the Johan Castberg find.
Earlier this year Statoil suspended the development of Castberg, thought to contain up to 600 million barrels of oil, because of rising costs, and said it would study new development concepts.
Analysts said that a big find at Ice Crystal would improve the chances of Castberg going ahead, especially if there is a possibility to connect the two, while a failure could raise questions about Statoil's Castberg project.
Statoil is the operator and holds a 50 percent stake, while Italy's ENI (MIL:ENI) holds 30 percent and Norwegian state firm Petoro has 20 percent.
(Reporting by Terje Solsvik; editing by Keiron Henderson)