Exploration for hydrocarbons in overpressured domains is often considered high risk because of the possibility of seal failure and fluid leakage due to natural hydraulic fracturing. Several of the wells drilled in highly overpressured reservoirs on Haltenbanken, offshore mid-Norway, have proved to be devoid of hydrocarbons suggesting that ineffective seals are the cause of exploration failure. However, recent petroleum discoveries within this area demonstrate that fluid pressure is not the ultimate control on entrapment of hydrocarbons. We investigate the way in which far-field tectonic compression may have influenced the in situ stress conditions on Haltenbanken, and assess whether tectonic stresses also may facilitate local fracturing of the seal by reducing the retention capacity (minimum horizontal stress-fluid pressure). We have approached the problem by applying a finite element model. The elasto-plastic model assumes two-dimensional plane-strain and is constrained from geological and geophysical data. The results show that: (1) contrasts in the rock's mechanical properties across discontinuities (e.g. sediment interfaces) cause rapid shifts in stress magnitudes; (2) the differences in stress magnitudes across such discontinuities can be subdued or enhanced under increased horizontal compression; and (3) structurally controlled variations in vertical displacements produce local concentrations of highs and lows in the stress field. The combined result of these three factors is that the magnitude of horizontal stress may vary quite considerably within spatially restricted areas. The implication of these predictions in terms of hydrocarbon preservation potential in highly overpressured regions is that rapid shifts in minimum horizontal stress magnitudes can reduce the retention capacity and therefore facilitate natural hydraulic fracturing.