Lundin says that the discovery was made in the Barents Sea, which is part of the Arctic Ocean located 100 miles (160 kilometres) from the Norwegian coast.
It estimates that the area could yield 125 to 400 million barrels of oil equivalent.
The location is 12 miles from another well in Gotha where Lundin struck oil last year and could make it possible to put joint operations in place in the region, the company said.
"This discovery is another positive step in relation to improving sufficient resources in the Loppa High area of the Barents Sea to enable the development of oil production infrastructure," said Ashley Heppenstal, chief executive of the company's Norwegian subsidiary Lundin Norway in a statement.
If the company's figures are confirmed, the find would be one of the biggest in Norway in more than a decade, although still far behind the gigantic Johan Sverdrup oil discovery of 2010 to 2011 which is set to produce between 1.8 and 2.9 billion barrels.
The Barents Sea has seen an increase in prospecting as North Sea oil and gas reserves dwindle, with the Johan Sverdrup discovery a rare exception.
Tuesday's announcement by Lundin came as Norway's Statoil announced their seventh gas finding off the coast of Tanzania. The size of the reserve is equal to around 216 million barrels of oil.