Offers sent for offshore ownership interests in APA 2011

Source: Norwegian Petroleum Directorate

On January 17th, offers were sent to 42 companies for 60 new production licenses on the Norwegian continental shelf.

The offers were given after the authorities had evaluated applications from 43 companies for Awards in Pre-defined Areas (APA) 2011.

Of the 60 production licenses, 34 are located in the North Sea, 22 in the Norwegian Sea and 4 in the Barents Sea. 15 of the production licenses are additional acreage to existing production licenses. Two of the new licenses are divided stratigraphically and only apply to levels below/above a defined stratigraphic boundary.

Of the companies that applied, 42 will be offered interests in at least one production license. 27 of the companies will be offered operatorships. Three of these, Valiant, Bayerngas og PGNiG, have not previously been operators on the Norwegian shelf.

“The companies show great interest in the acreage made available in the APA. There was considerable competition in some of the areas in this year’s round. The overall level of the applications is quite good, and almost everyone will be awarded acreage, says Sissel Eriksen, director of exploration for 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 eleven areas, and seven fixed wells are to be drilled: 5 in the North Sea (GDF Suez, Lundin, Statoil, Total), 1 in the Norwegian Sea (Faroe) and 1 in the Barents Sea (Det norske). 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.

Since the first APA round in 2003, the APA acreage has been expanded several times and for the APA 2011 comprised a total of 186,300 square kilometers. APA 2011 was announced on March 11th 2011. At the deadline of September 14th 2011, the area available for applications consisted of 108,433 square kilometers out of this total. This was an increase of 23,500 square kilometers from the previous year. 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.

Sissel Eriksen feels the APA scheme works well, and as intended. Faster turnover of acreage leads to stabile activity.

The scheme also ensures that the industry secures regular access to exploration acreage and that acreage is relinquished more quickly. About 125 previously awarded APA licenses have been relinquished, thus making the acreage available for new players.

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