OSLO, Norway -- Activity throughout the Norwegian shelf remains high, according to the latest review by the Norwegian Petroleum Directorate, and investments should rise over the next few years. However, NPD is concerned that over 50% of Norway’s discovered oil languishes undeveloped.
”The fact that the companies on the Norwegian shelf are not able to achieve maximum exploitation of our fields poses a challenge,” says director general Bente Nyland. “Although our recovery rate is among the best in the world, we are still not satisfied. If we manage to recover just 1% more, this would mean revenues in the hundreds of billions for Norway.”
NPD claims that time is running out for measures to be implemented to curb the decline in Norwegian oil production, and recommends increased development of existing reserves and mature resources.
The review found that production offshore Norway fell 4% last year to 230 MMcmoe (1.4 Tboe), with a trend towards declining oil output. The percentage of gas in total sales of petroleum, however, is forecast to increase from 46% in 2010 to 51%.
NPD says insufficient new reserves are being found to offset the decline. Norway’s volume of undiscovered resources has dropped from 3.3 to 2.6 bcmoe (20.76 to 16.35 Bboe). This is due partly to disappointing drilling results in the deep water areas of the Norwegian Sea and the results of surveys off frontier northern areas such as Lofoten, Vesterålen, and Senja.
”In light of this, we are eagerly awaiting the opportunity to map a new part of the continental shelf,” Nyland said. “The NPD has received appropriations of NOK 180 million ($30.6 million) to map the Norwegian shelf north of the 68th parallel, including the new area between Norway and Russia. We are just waiting on parliamentary ratification of the border by the Norwegian Storting and the Russian Duma.”
Nyland was more satisfied by the total of 16 discoveries on the Norwegian shelf last year, comprising 10 in the North Sea and six in the Norwegian Sea. Altogether, 41 exploration wells were completed in 2010, of which 32 were wildcats.
The authorities approved plans for development and operation for three fields in the North Sea and one in the Norwegian Sea.
Overall upstream investments across the sector should reach around NOK 150 billion, ($25.5 billion) NPD adds, slightly higher than the peak year, 2009.