Norway awards 50 production licenses in APA 2010

Source: Norwegian Petroleum Directorate

On January 18, the Norwegian Petroleum Directorate sent offers to 39 companies for 50 new production licenses on the Norwegian Continental Shelf

The offers were submitted after the authorities had evaluated applications from 41 companies in the Awards in Pre-defined Areas (APA) 2010

Of the 50 production licenses, 31 are located in the North Sea, 17 in the Norwegian Sea and two in the Barents Sea. Eighteen of the production licenses are additional acreage for existing production licenses. Seven of these are adjacent to discoveries/fields. Six of the new licenses are divided stratigraphically and only apply to levels below/above a defined stratigraphic boundary. 

Of the companies that applied, 39 will be offered interests in at least one production license. Twenty-two of the companies will be offered operatorships. Two of these, Edison International and Spring Energy, have not previously been operators on the Norwegian Shelf. 

“The emergence of new operators is satisfying. It shows that the companies are developing and the number of players is increasing. It is important to explore the mature areas on the shelf thoroughly,” said exploration director Sissel Eriksen in the Norwegian Petroleum Directorate. 

The offers are subject to obligations stipulated by the authorities. There is a requirement for acquisition of new seismic data in six areas and three fixed wells are to be drilled: Two in the North Sea (Statoil and Talisman) and one in the Norwegian Sea (Wintershall). For the other production licenses there are “drill or drop” conditions. This means that the licensees have from one to three years in which to make a decision to drill a well. If they do not wish to do so, the production license lapses. 

APA 2010 was announced on 19 February 2010. Up until the deadline of 15 September 2010, the companies could apply for area totalling 84,854 square kilometers divided into 306 blocks. This was 30,000 square kilometers more than at the application deadline the year before. The increase is due both to areas relinquished during the course of the year and an expansion of the area covered by the APA scheme. 

Since the first APA round in 2003, the APA acreage has been expanded several times and for the APA 2010 comprised a total of 162,826 square kilometers. This was an increase of 22,600 square kilometers from the year before. 

Sissel Eriksen is very satisfied with the results of the APA scheme. She states that it contributes to mature areas on the Norwegian shelf being explored more thoroughly and quickly. New players with new ideas and new exploration goals have yielded more new discoveries in old areas. Discoveries have been made in about 40 per cent of the more than 60 wells that have been drilled in production licenses awarded under the APA scheme, and more than 180 million standard cubic meters of recoverable oil equivalents have been proven to date. 

The scheme also ensures that the industry secures regular access to exploration acreage and that acreage is relinquished more quickly. Nearly 100 previously awarded APA licenses have been relinquished, thus making the acreage available for new players.

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