STAVANGER, Norway –A new analysis released by Wood Mackenzie at ONS 2014 examines the role incremental offshore projects could play in Norway over the next 10 years and sees spending of $200 billion in upstream development.
“As the Norwegian continental shelf is maturing and the government wants to increase overall recovery rates from 50-60%, brownfield and incremental projects are becoming more important,” said Lennert Koch, senior North West Europe Upstream research analyst. “We estimate that incremental projects - such as compression installations, infill drilling programmes and field redevelopments - account for almost half of the estimated $200 billion of upstream development spend over the next 10 years.”
The report also indicates that the cost per barrel and the risk basis ofincremental projects can compare favorably to those for greenfield developments.
Two cautions are noted, however. For one, the costs of several current incremental projects have been increased above theinitial estimates. Secondly, the 2013 tax changes by the Norwegian government adversely affected economics for these types of projects.