STAVANGER, Norway, Nov 1 (Reuters) – Norway’s Statoil believes sizeable oil finds can still be made in the North Sea even though the area has been explored for decades, a senior company executive said on Tuesday.

The search for oil and gas has been hit by energy firms’ reduced spending, triggered by a slump in crude prices since mid-2014, yet the oil major still sees a large potential.

“We believe there is at least another 500 million barrels oil discovery to be made in the North Sea, definitely,” Statoil’s exploration chief for Norway and Britain, Jez Averty, told an oil industry conference.

He later told Reuters that such a discovery was more likely in the Norwegian part of the North Sea, rather than the British one, as the Norwegian part is less explored.

Annual global discovered volumes are down 75 percent over the past four years and third-quarter results indicate that 2016 is heading towards a replacement ratio of only 6-7 percent for liquids, according to data from Rystad Energy.

In Norway, no commercial discoveries have been made so far in 2016.

“Now we are down to replacing below 20 percent of the resources on the Norwegian Continental shelf,” said Nils-Henrik Bjurstroem of consultancy Rystad Energy. A historical average shows a ratio of around 50 percent in Norway, he added.

The reserve replacement ratio measures an oil company’s ability to find new resources to replace existing production.

“If we look at discovered volumes we have been finding less since the mid-90s so from that large-scale perspective, yes I think we are beyond peak exploration,” Averty said, adding that drilling fewer wells did not necessarily mean finding less oil.

When asked whether Statoil would be able to increase its replace ratio during difficult times, Averty told Reuters: “That is the big question … It is clear that we need to do things differently, the warnings signs are there.”

“At $50 at the moment, Statoil continues to lose money … But clearly we can’t just twist and turn plans with every small swing in oil prices. We need to find a balance,” he said.

On the bright side for Statoil, the lower price means a lower price tag on exploration assets.

“The market right now is that the number of opportunities are higher than a few years ago and the prices of those opportunities are much lower so this makes it a very attractive time to be growing our portfolio,” he said.

(Reporting by Stine Jacobsen, editing by David Evans)

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