Investment and activity offshore Norway will remain high over the next five years, according to the Norwegian Petroleum Directorate’s (NPD) latest annual review.
Last year, just under NOK 150 billion ($25 billion) was invested on activities throughout the Norwegian continental shelf. This year NPD forecasts NOK 170 billion ($28.5 billion), followed by moderate growth toward 2016 - factors include several planned field developments and new developments on older fields.
Last year ConocoPhillips submitted plans for development and operation (PDOs) for Ekofisk Sør and Eldfisk II in the southern North Sea, which will help extend recovery from the area by 40 years. Costs are estimated at around NOK 65 billion ($10.9 billion), including new production facilities.
Lundin and Det norske oljeselskap are also working on a coordinated solution for the Luno and nearby Draupne fields on the Utsira High in the North Sea which could include fixed platforms.
Total will soon submit a PDO for Hild, an oil and gas discovery dating from 1978. The plan calls for an independent production facility resting on the seabed.
During 2011 NPD identified 22 new oil and gas discoveries, comprising 16 in the North Sea, three in the Norwegian Sea, and three in the Barents Sea. A total of 54 exploration wells were drilled, up from 41 the previous year.
In the North Sea, the 16/2-6 Aldous/Avaldsnes find was among the five all-time largest oil discoveries on the Norwegian shelf, with reserves currently estimated at around 1.8 Bboe. However, the picture will likely change after the results of the six or seven new appraisal wells planned this year.
In the Barents Sea, NPD adds, the Skrugard, Norvarg, and Havis discoveries have renewed optimism and interest in the area.
NPD’s Director-General Bente Nyland commented: “We still have very good profitability, and we are able to develop discoveries that have been fallow for several years.”
However, she advised the industry to focus more on boosting oil extraction from Norway’s producing fields.
“A production license comes with a commitment, and everything that is profitable must come up. If we are to extract more from the current fields, we must drill more wells.”
State Secretary Per Rune Henriksen in the Ministry of Petroleum and Energy issued a warning about development costs. “A high cost level has a direct effect on value creation, and constitutes a risk that the resources will not be recovered. This is primarily the industry’s responsibility, and it would be wise to take this seriously.”