Photo: Illustration; Credit: Morten Berentsen/NPD

Norwegian authorities expect up to 40 exploration wells this year

Norway has recorded a high level of exploration activity in the first half of 2022, which has led to six discoveries so far. The country’s authorities are anticipating a total of up to 40 exploration wells to be drilled this year.

The Norwegian Petroleum Directorate (NPD) revealed on Wednesday that production was high in Norway during the first quarter of 2022. The first part of the year was also marked by a significant interest in storing CO2 in the subsurface.

According to the NPD, a total of 17 exploration wells were drilled in the first half of 2022, 14 of which were wildcat wells. This has resulted in six discoveries with two of these being close to the Johan Castberg field in the Barents Sea. The NPD explained that the sum of these and other discoveries in the area is close to half of the volume in Johan Castberg, which was 89 million Sm3 of oil – 560 million barrels – when the development plan (PDO) was submitted.

Torgeir Stordal, Interim Director General, remarked: “These are important additional resources that will help increase value creation and extend the life of Johan Castberg.”

Based on the directorate’s records, the authorities expect a total of between 35 and 40 exploration wells this year, which is on par with last year. Most of these wells are expected to be drilled close to infrastructure, although drilling will also be carried out in more “frontier” areas, in addition to wells that will test unconfirmed plays.

Kalmar Ildstad, the NPD’s Director of Licence Development, commented: “I’m pleased to see that the companies are still exploring. In order to utilise spare capacity, it is particularly important to quickly clarify the potential for further discoveries that can be tied back to existing infrastructure.”

Europe wants Norwegian gas

The NPD outlined that the first half of 2022 saw “substantial” demand for Norwegian gas following Russia’s invasion of Ukraine and as a result of the EU’s goal to reduce imports of Russian gas intending to ban almost 90 per cent of Russian oil imports by the end of the year. To this end, the European Union and Norway strengthened their energy cooperation last month.

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In lieu of this, the Norwegian authority highlighted that production and deliveries of Norwegian gas are at “very high levels,” with 60.83 billion standard cubic metres of gas produced during the first half of 2022. In accordance with this, gas prices have increased “significantly.”

The NPD also emphasised that measures have been implemented at certain fields, which are anticipated to yield increased deliveries of gas over the short term. In some cases, the companies have been permitted to sell gas that was originally slated for injection in the fields while a somewhat larger share of liquids production was also sold as pipeline gas.

When it comes to oil, 47.2 million standard cubic metres – just under 300 million barrels – of oil were produced from the Norwegian shelf during the first six months of the year.

Interest in CO2 storage on the rise

The Norwegian authorities awarded two exploration licences this year for storing CO2, one in the North Sea and one in the Barents Sea. In addition, the authorities have received applications from three companies to be awarded acreage to store CO2 in the subsurface in the North Sea.

“We’re experiencing increasing interest in acreage for storing CO2. This indicates that more players are seeing opportunities for future value chains within capture, transport and storage of CO2,” added Stordal.

More exploration opportunities

Back in January, 28 companies were offered interests in 53 production licences on the Norwegian shelf through Awards in Pre-defined Areas (APA) 2021.

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Out of these 53 production licenses offered in this round, 28 are in the North Sea, 20 in the Norwegian Sea and 5 in the Barents Sea. However, 17 of the production licences are supplemental acreage for existing production licences.

The NPD further reminded that the Ministry of Petroleum and Energy (MPE) announced APA 2022 last month. This covers blocks in the North Sea, Norwegian Sea and Barents Sea.