Norwegian Petroleum Directorate announces the shelf in 2012

Friday, Jan 11, 2013

Norwegian gas achieved record sales in 2012, while oil production declined more than expected. However, new profitable discoveries and a record number of developments in recent years form a basis for long-term value creation.

The Norwegian Petroleum Directorate’s (NPD’s) forecasts predict high activity in the next five-year period, and total production is expected to remain around the same level as in 2012. Thirteen new discoveries were made last year, five in the North Sea, five in the Norwegian Sea and three in the Barents Sea. Forty-one exploration wells were completed.

The largest oil discovery is 7220/7-1 «Havis» in the Barents Sea, and the plan is to develop this together with 7220/8-1 «Skrugard», which was discovered in 2011. Both discoveries provided major contributions to the considerable interest in the Barents Sea, as made apparent in the applications for the 22^nd licensing round, announced in 2012.

“A high oil price, high level of exploration success and high activity level also set high expectations for the industry. These expectations are laid down in the Petroleum White Paper and deal with just that; making discoveries, developing the discoveries and, not least, improving recovery from producing fields,” says Director General Bente Nyland.

Statoil and Lundin have drilled several appraisal wells on the major discovery Johan Sverdrup in the North Sea. Statoil also made a gas discovery, 2/2-21 «King Lear» in the southern part of the North Sea, and Wintershall made an important oil discovery in well 35/9-7 «Skarfjell» in the northern part of the North Sea.

The resources in the new discoveries are estimated at 132 million standard cubic metres of oil equivalents (Sm³ o.e.), this corresponds to 58 per cent of total oil production in 2012. Exploration

Currently, 16 field developments are underway on the Norwegian shelf.

In addition, the companies have indicated that they plan to submit another approx. 20 Plans for Development and Operation (PDOs) in the upcoming two years. This results in a high investment level. The investments – including exploration – are expected to total approx. NOK 157 billion in 2013 and are expected to steadily increase to about NOK 190 billion in 2017. This results in an annual growth of approx. five per cent. A large part of the cost growth comes from drilling operations from mobile drilling rigs.

Petroleum production is expected to decline somewhat in 2013 and then increase again in 2014 – and will then remain at the same level until 2017. The unexpected decline in oil production in 2012 was more than offset by the record-high gas sales, and gas will represent more than half of petroleum sales from the shelf in the next five-year period.

The NPD reviewed the undiscovered resources in 2012. This work, together with new discoveries and reassessment of previous resource estimates, has resulted in an increase in the total resources on the shelf – from 13.1 to 13.6 billion standard cubic metres of oil equivalents. This figure includes oil and gas that has been sold and delivered.

“The increase in the resource estimate and major new discoveries show that the Norwegian shelf still has some surprises left, and that there is good reason for continued optimism on behalf of the oil and gas activities in Norway,” says Bente Nyland.

Source: Norwegian Petroleum Directorate

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