The Norwegian Petroleum Directorate has cut by 20 percent its best estimate of how much oil and gas lies in the budding near-arctic oil province of the southern Barents Sea, it was revealed Tuesday.

In its Resource Report 2009, the NPD also trimmed by 12 percent the reserves it expects oil companies to find in future, admitting in its Barents-focused reporting that the numbers could yet vary wildly.

“Unfortunately, many of the new finds (in the Western Barents) are small and signficantly less than that which was assumed before drilling started,” the report’s authors wrote.

They said the NPD had “reduced expecations of large, future finds” in the southern part of the Eastern Barents.

The good news was that more prospects than expected have been uncovered by state-sponsored surveys and increased oil-company exploration since 2006.

But uncertainty reined for the Barents, once-touted as a major oil province in waiting, a conviction given strength by the latest U.S. Geological Survey appraisals of the Arctic that had lifted the reserve count by nearly 10 percent in recent years.

“After 43 years of exploration and 40 years with production, how much of the proven reserves can be produced profitably and how large the undiscovered resources are is still uncertain,” the NPD report said.

Producible reserves offshore Norway, including in the Norwegian Sea and North Sea are said to be between 10 billion cubic metres and 17 Bcm of oil equivalents.

The lower Barents reserve count comes despite the confirmation of new exploration models by discoveries among the 18 wildcat wells drilled.

The news will come as a blow to an oil industry keen to grow large developments such as Snøhvit and Goliat. Both StatoilHydro at the former and Eni at the latter have expressed hopes that satellite discoveries would further bolster their developments in remote, sparsely populated northern Norway.