Norway discovery rate encouraging, NPD claims

The year to date has been one of the best in terms of discoveries on the Norwegian continental shelf, according to the Norwegian Petroleum Directorate (NPD).

Offshore staff

OSLO, Norway – The year to date has been one of the best in terms of discoveries on the Norwegian continental shelf, according to the Norwegian Petroleum Directorate (NPD).

Recent major oil finds in the North Sea in particular prove that the government’s APA scheme (awards in predefined areas) and the changes made in exploration policy are yielding results, NPD claims.

It points out that Lundin’s 16/2-6 Avaldsnes find occurred in an area awarded in APA 2009, and Statoil’s 16/2-8 Aldous Major South in an area licensed under the 2000 North Sea Round (a precursor to the APA scheme).

The discoveries also support NPD’s long-held view that significant undiscovered resources still remain on the Norwegian shelf, and that these could form the basis for large-scale production.

In its new report on Petroleum Resources on the Norwegian continental shelf, NPD says it expects future oil and gas production to remain at current levels for the next decade, in spite of a gradual decline in production from the major fields.

Measures to lift recovery and bring on line further discoveries will help sustain production. After 2020, NPD expects contributions from presently undiscovered resources to account for an increasing share of production.

NPD assume that undiscovered resources in the North Sea will grow following Lundin and Statoil’s successes, and points out that the discovery success rate on the Norwegian shelf is high, with a 55% rate for wells drilled in 2010.

As of December 31, 2010, resources in discoveries not approved for development amounted to 5% of the total expected resources on the Norwegian shelf, and 9% of the country’s remaining resources.

Since 2005, NPD adds, 25 of 30 developments have entailed subsea templates. These solutions have boosted profitability, particularly for small finds or those in deep water, with production from subsea wells surpassing production from wells on fixed facilities in 2010. This trend will likely continue, as discoveries become smaller.

As for improved recovery techniques, NPD says that post-2002, more gas has been injected in Norway’s subsea wells than in wells on fixed facilities.

Since 2004, total gas injection has been reduced, and post-2004, so has the volume of water injected for pressure support. This is due partly to major reductions on Gullfaks and Draugen, and the late-phase project on Statfjord, although some of the decline in injection can be attributed to shut-in injection wells.

Norwegian licensees have identified drilling and wells as the most effective means in the short-term of extracting more oil from fields in operation. Drilling targets are shrinking, NPD claims, and water production is increasing, so that less oil is being produced per well. As a result, more wells will have to be drilled to extract oil volumes.

However, fewer Norwegian development wells are being drilled at present than in 2000, and plans for new wells are being postponed.

NPD is concerned by this and the trend toward delay or cancellation of numerous technology projects and pilot tests. It maintains that a continued focus on R&D and implementation of new technology is critical for future value creation from the Norwegian shelf.


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