"Eleven people found, none alive. Search continuing for the two others," the Sola rescue centre tweeted around three hours after the crash.
The chances of finding the two alive were seen as slim. Sola spokesman Anders Bang Andersen told reporters that emergency crews had "not seen any sign of survivors".
The Super Puma chopper went down around midday in the archipelago off the coast of Bergen, Norway's second biggest city, carrying 11 Norwegians, one Briton and one Italian.
Bang Andersen said the chopper had been on its way to Bergen's airport when it crashed with 11 passengers and two crew members on board.
More From This Section
It was returning from the Gullfaks B platform, in one of Norway's biggest offshore oil fields, which is operated by state-owned Statoil.
Several witnesses described seeing the aircraft spiral downwards, followed by a powerful explosion, and people were seen in the sea.
"Pieces (of the helicopter) flew into the air," she said, adding that she saw the rotor detach.
The crash was the deadliest helicopter accident in Norway since 1997, when a chopper flying to an offshore oil platform plunged into the sea, killing all 12 on board.
"Horrible reports of a helicopter crash," Prime Minister Erna Solberg tweeted. "I'm being continuously briefed on the rescue operations."
The accident took place around noon (1000 GMT), and more than an hour later boats could be seen criss-crossing the water as helicopters hovered overhead. Divers were seen at the site, and ambulances were parked on the shore.
On Twitter, police urged people to refrain from using drones in the area.
The chopper was an EC225 Super Puma built by Airbus Helicopters and operated by CHC Helikopterservice for Statoil.
The oil giant said it had grounded all helicopters of the same model and set up an emergency help centre in Bergen for families of the missing.