Norway Offers 65 Production Licences to 48 Companies
Today, January 21st, the Norwegian government has sent offers to 48 companies for 65 new production licences on the Norwegian continental shelf. The offers are being issued after the authorities have evaluated applications from 50 companies in the Awards in Pre-defined Areas (APA) 2013.
Of the 65 production licences, 38 are located in the North Sea, 19 in the Norwegian Sea and 8 in the Barents Sea. Seventeen of the production licences are additional acreage to existing production licences. Ten of the new licences are divided stratigraphically and only apply to levels below/above a defined stratigraphic boundary.
A record number of companies applied for available acreage this year.
“I am very pleased to send out offers today to 48 companies for participation in a total of 65 new production licences on the Norwegian shelf. This is a new record, both in the number of production licences and the number of companies. The awards provide a good basis for further exploration of some of the most well-established exploration areas on the Norwegian shelf,” says Minister of Petroleum and Energy Tord Lien.
“It is clear that the oil companies still consider it interesting to explore for oil and gas in mature areas,” says Sissel Eriksen, exploration director in the Norwegian Petroleum Directorate.
Greatest interest was shown for the northern part of the North Sea and central part of the Norwegian Sea.
“We see that a lot of good work has been put into most applications, and some have submitted very interesting exploration concepts,” says Eriksen. “The level of the applications was generally very high, and nearly everyone who applied in APA 2013 will receive ownership interests.”
She believes the interest stems from familiar geology, and notes that several of these areas have a time-critical infrastructure. Exploring the nearby areas in order to realise the resource potential is therefore urgent.
Of the companies that applied, 48 will receive offers of ownership interests in at least one production licence. Twenty-nine companies will be offered operatorship. Petoro will participate as a licensee and will manage the State’s Direct Financial Interest (SDFI) in 12 production licences.
The offers are subject to obligations stipulated by the authorities. There is a requirement for acquisition of new seismic in 11 areas and a firm well must be drilled in the southern North Sea. For the other production licences there are “drill or drop” conditions. This means that the licensees have between one and three years to decide whether they want to drill an exploration well. If they do not wish to drill an exploration well, the production licence lapses.
From the first APA round in 2003, the APA area has been expanded several times and for the APA 2013 comprised a total of 199,054 square kilometres, an increase of 860 square kilometres from APA 2012. APA 2013 was announced on February 15th 2013. Up until the deadline of September 11th 2013, the companies could apply for a total of 103,029 square kilometres.
Exploration director Sissel Eriksen believes the APA scheme functions well and as intended. The industry has a predictable framework, and the authorities achieve the goal of more rapid turnover of area and steady exploration activity.
Press Release, January 21, 2014