The chopper was transporting workers from a North Sea offshore oil field when it crashed around midday near the shoreline off the coast of Bergen, Norway's second biggest city.
"They are searching in the hope of finding survivors. So far we have not seen any sign of survivors," Sola rescue centre spokesman Anders Bang Andersen told reporters.
He told AFP that the chopper had been en route to the Bergen airport Flesland when it crashed with 13 people on board, including two crew members.
Several witnesses described seeing the aircraft spiral downwards, followed by a powerful explosion, and people were seen in the sea.
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"There was an explosion and a very peculiar engine sound, so I looked out the window. I saw the helicopter falling quickly into the sea. Then I saw a big explosion," a local resident told local daily Bergensavisen.
"Pieces (of the helicopter) flew into the air," she said, adding that she saw a rotor blade detach.
Some media outlets reported that people had been rescued, but the reports were contradictory and Bang Andersen was not able to confirm or deny them.
Live footage showed leisure boats rushing toward the scene, where thick black smoke was billowing into the sky.
The accident took place around noon (1000 GMT), and more than an hour later boats could be seen criss-crossing across the water as helicopters hovered overhead. Divers were seen at the site, and ambulances were parked on shore.
On Twitter, police urged people to refrain from using drones in the area.
The helicopter was returning from the Gullfaks B platform, in one of Norway's biggest offshore oil fields, which is operated by state-owned Statoil.