* Firms have until Jan. 14 to nominate areas to explore
* Only limited number of blocks likely in eastern Barents
* Previous round included 20 blocks awarded in Arctic
OSLO, Aug 28 (Reuters) - Norway invited oil and gas firms onWednesday to bid for the first licences to drill in the easternpart of its Arctic waters, three years after it settled a borderdispute with Russia.
With oil production on course to fall to a 25-year low thisyear, Norway is looking to tap reserves further into the Arcticas it runs out of prospects in the North Sea.
Oil and gas firms will have until Jan. 14 to nominate blocksthey want to drill, including for the first time in the easternBarents Sea. The area, as big as Switzerland, is estimated tohold about 1.9 billion barrels of oil equivalent, of which 15percent is oil, the Norwegian Petroleum Directorate (NPD) said.
Norway and Russia ended a 40-year old dispute over theirmaritime borders in 2010 but some fields are likely to lie onthe border, complicating eventual production, the NPD said.
The government cautioned that only a limited number oflicences are likely to be offered in the coveted easternBarents, as it wants to build up activity gradually andefficiently. It aims to award the licences in the second quarterof 2015.
In its previous round, Norway earlier this year awarded 24licences to energy firms, including 20 in the western parts ofthe Barents, where some big discoveries have already been made.
Norway's Statoil was among the biggest winners,taking stakes in seven licences and winning the right to operatethree of them, while Italy's Eni also won threeoperatorships. Russia's Lukoil and Rosneft,newcomers in Norway, also won stakes.
Licences were also awarded to international majors RoyalDutch Shell, BP, ConocoPhillips andTotal.