Oil Firms Show Record Interest in Mature Areas Offshore Norway
OSLO - A record number of oil companies have applied for production licenses in mature areas offshore Norway, the country's Ministry of Petroleum and Energy said Friday.
By the Sept. 6 deadline, some 47 companies had applied for 2012 awards of production licenses in so-called predefined areas on the Norwegian continental shelf, the ministry said. The number of applications was the same as in the record year 2008 and three new companies had applied in 2012, according to the Norwegian Petroleum Directorate.
High oil prices, currently at $114 per barrel, have contributed significantly to the level of exploration activity offshore Norway in recent years, the directorate said, and the number of applications showed that companies still had "considerable interest" in further exploration of predefined areas in the North Sea, the Norwegian Sea and the Barents Sea.
Norway's total oil and gas investments are currently at a record high, and are expected to set a new record 204 billion kroner ($35 billion) in 2013, Statistics Norway said Thursday.
The Ministry of Petroleum and Energy said it expected to award the new predefined area licenses in January 2013.
"Exploration results in recent years have shown that there is still significant potential for discovering new resources, also in mature areas," said Norway's Minister of Petroleum and Energy Ola Borten Moe in a press release.
The most striking example of that potential is the Johan Sverdrup discovery, estimated to contain at least 1.8 billion barrels of oil equivalent, which was discovered in 2010 in the North Sea, a mature area which had been thoroughly explored for several decades.
Norway's awards of licenses in pre-defined areas have given many new companies the opportunity to explore mature areas, leading to several new discoveries.
"There is great interest among the oil companies," said Sissel Eriksen, director for exploration at the Petroleum Directorate. "We see that there is competition for acreage that has been awarded and relinquished several times previously."
Small discoveries can be developed faster and more profitable in mature areas than in less mature areas, because they can be connected to existing infrastructure, the directorate said.
"The government wants to maintain a stable level of exploration activity while also ensuring continued value creation and securing future state revenue streams from petroleum activities," said Mr. Moe.
Among the companies seeking licenses were Statoil ASA, Royal Dutch Shell PLC, Centrica PLC, ConocoPhilips, Exxon Mobil Corp., BP PLC, GDF Suez SA, Lundin Petroleum AB, Total SA, Eni SpA and Wintershall AG.
Copyright (c) 2012 Dow Jones & Company, Inc.
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