Norway awards record licenses in latest offshore round

The Norwegian Ministry of Petroleum and Energy has awarded 83 new production licenses to a total of 33 companies under Norway’s Awards in Predefined Areas 2018 round.

Offshore staff

OSLO, Norway – The Norwegian Ministry of Petroleum and Energy has awarded 83 new production licenses to a total of 33 companies under Norway’s Awards in Predefined Areas (APA) 2018 round.

This is the largest number of awards to date for a Norwegian licensing round: 37 of the licenses are in the North Sea, 32 in the Norwegian Sea and 14 in the Barents Sea, while 18 are additional acreage to existing production licenses.

“This new record confirms the industry’s belief in continued value creation and activity in Norway,” said Minister of Petroleum and Energy, Kjell-Børge Freiberg.

“The number of awards shows that the companies believe that more resources remain to be found in areas with known geology and near existing infrastructure,” added Torgeir Stordal, exploration director at the Norwegian Petroleum Directorate.

“It is important that these resources are discovered while we still have infrastructure such as platforms and pipelines nearby – then even small discoveries can be developed profitably,” he continued.

“One reason why the companies still find it attractive to explore in mature areas could be that large parts of the shelf are now covered by new and improved seismic data, which together with new technology enable the companies to identify new exploration targets.”

Thirty-eight companies submitted applications (state-owned Petoro is not included in this number), with 33 successful in securing ownership interests in at least one production license.

Jamie Thompson, an analyst with Wood Mackenzie’s Europe upstream team, said: “It’s undoubtedly positive to see so many license awards and active companies in this year’s APA. But the proof is in the work commitments, and those left something to be desired, with the number of wells down from five to three on last year.

“Of the three commitment wells,Aker BP operates two and ConocoPhillips one. Two lie on adjacent licenses west of Aerfugl, in the gas-prone area of the Norwegian Sea, while the second Aker BP well is near its proposed NOAKA development [in the North Sea].

“The Norwegian mid-cap may be looking to firm up resources in the area to aid in the commerciality of a split development between itself and Equinor, who is pushing ahead with concept select for the separate Krafla-Askja Area in Q1 this year.”

Thompson added: “The usual suspects Equinor, Aker BP, and Lundin dominate operatorships in the Barents. But perhaps more surprisingly,DNO — hot off the back of its Faroe Petroleum acquisition — makes headway…

“Growth through the drill bit is central to the growth plans of DNO - Norway’s newest E&P, and it’s not shy about plunging in to the Barents with wells at Pointer/Setter and Korpfjell Deep both set to complete in 2019. These new licenses show it’s committed to the Barents beyond this year’s campaign.”

Thompson said some of the commitment wells could spud before year-end, adding further impetus to what looks set to be a high-octane year for Norwegian offshore exploration drilling.

Of the companies to comment so far on their awards,Equinor has 29 new licenses, 13 as operator and 16 as a partner.

Nick Ashton, the company’s svp exploration for Norway and the UK, said: “Equinor is committed to a high exploration activity on all parts of the NCS [Norwegian continental shelf]. These awards fit with our strategy to maximize value creation through existing infrastructure and test new ideas that could create growth options.

“In line with our NCS roadmap, we have an increased focus on gas opportunities and that has also been reflected in our application and today’s awards.”

Aker BP has been offered interests in 21 new licenses, 11 as operator.

Evy Glørstad-Clark, the company’s svp Exploration, said: “These awards increase Aker BP’s footprint in areas close to our operated hubs. We have also identified new potential growth opportunities in some of the licenses awarded today.

“Of the 21 production licenses awarded to Aker BP, 12 are located in the North Sea (five as operator), three in the Norwegian Sea (two as operator) and six in the Barents Sea (four as operator).

Vår Energi, the new Norwegian independent formed from the merger of Eni Norge with Point Resources, secured interests in 13 licenses, including four as operator: PLs 985 and 980 in the North Sea, and PLs 1025 S and 229 E in the Barents Sea.

Wintershall Norge garnered shares in six licenses in core areas for the company, four in the Norwegian Sea and two in the North Sea.

One of the licenses is in the Q35 area of the North Sea, where Wintershall operates the Vega field and is also developing Nova nearby: both are subsea tiebacks to the Neptune Energy-operated Gjøa field, in which Wintershall has a 20% stake.

In the Norwegian Sea three of the new licenses support Wintershall’s strategy of gas exploration in the Vøring basin, where it has a 24% interest in the recently onstreamAasta Hansteen field and is operator of the Balderbrå discovery and the Marisko prospect. The other Norwegian Sea license is close to the company’s operated Maria oil field.

DEA, soon to merge with Wintershall, gained nine new licenses, four in the Norwegian Sea, three in the North Sea, and two in the Barents Sea.

It will operate PL 1010 in the Norwegian Sea, PL 989 in the North Sea, and PL 1021 in the Barents Sea.

DNO Norge will participate in 18 exploration licenses, five as operator. Nine of the company’s awards are in the North Sea, two in the Norwegian Sea and seven in the Barents Sea.

Neptune Energy picked up nine licenses in mature areas, four as operator and five as partner. These are in the greater Njord-Fenja area (Halten Terrrace) in the Norwegian Sea; the Gjøa-Cara area, near the Snorre field in the Tampen Spur, and in the Central Graben, all in the North Sea.

Odin Estensen, managing director of Neptune Energy Norge, said: “An important part of our strategy is to grow operatorship and acreage in or around our core areas.

“Through this licensing round, we have strengthened our position in the North Sea, which is an important area for us in Norway. Importantly, we have also strengthened our role as operator in this area – and are keen to explore the opportunities within these licenses.”

Lundin Norway received 15 license interests, a record haul for the company. Eight are in the North Sea, two in the Norwegian Sea and five in the southern Barents Sea.

The company, which will operate nine of its new licenses, said the awards builds on its existing six core areas while also supporting a new position in the Norwegian North Sea close to the Horda platform area.

Oslo-based Pandion Energy gained 20% stakes in two North Sea licenses. PL 985 (blocks 25/5, 6, 8 and 9) is in the central Norwegian North Sea, north and east of the Ringhorne and Jotun fields. To the southeast is the company’s PL 820 S, where a well is due to be drilled later this year.

Its other new award, PL 636 B (blocks 36/7) is additional acreage to PL 636, where the partners plan to submit a plan for development and operation (PDO) for the Cara discovery soon. The location is on the Måløy slope, east of Gjøa field.

The full list of awards (licenses and operatorships in brackets) are as follows:

Aker BP (21/11)

AS Norske Shell (4/2)

Capricorn (1/0)

Chrysaor (2/0)

Concedo (3/0)

ConocoPhillips (3/3)

DEA (9/3)

DNO (18/5)

Dyas (1/0)

Edison (4/2)

Equinor (29/13)

Faroe (8/4)

Idemitsu (1/0)

INEOS (6/2)

Inpex (3/0)

Lime (1/0)

Lundin (15/9)

M Vest (4/0)

MOL (1/0)

Neptune (9/4)

OKEA (4/3)

OMV (11/6)

Pandion (2/0)

Petrolia NOCO (5/1)

PGNiG (3/2)

Repsol (4/2)

Source (2/0)

Spirit (9/2)

Suncor (4/2)

Total (2/1)

Vår Energi (13/4)

Wellesley (6/0)

Wintershall (6/2)

01/16/2019

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