Gas Output from Norway's Continental Shelf Reached Record Levels in 2006

Gas production on the Norwegian shelf in 2006 reached record levels, while oil production was lower than expected. Twenty-six exploration wells were spudded in 2006, which is twice as many as in the previous year. However, only four discoveries were made. The shelf is otherwise characterized by a shortage of rigs and increasing prices. The shelf in 2006 contains facts from the year that has passed, as well as the outlook for the next five-year period.

Petroleum production
A total of 248 million Sm3 marketable oil equivalents (o.e.) were produced in 2006. This is 16 million Sm3 o.e. less than in the record year 2004. Total production of petroleum in 2007 is expected to exceed 240 million Sm3 o.e.

Activity level
Investments in 2006 are estimated at 85 billion 2006-NOK, excluding exploration costs. This is 2.5 billion (three percent) more than was forecast in the spring of 2006. For 2007, investments excluding exploration costs are estimated at 82 billion 2006-NOK. In addition, it is expected that NOK 23 billion will be spent in connection with exploration.

New fields
One new field commenced production during 2006; Ringehorne Ost. An additional seven new fields are expected to start producing in 2007; Alvheim, Blane, Enoch, Ormen Lange, Volve, Snohvit and Vilje.

Three plans for development and operation (PDO) and plans for installation and operation (PIO) were approved during 2006. Three applications for PDO exemptions were also approved. In 2007, approximately eight PDOs for development of discoveries will likely be submitted to the authorities. In addition to these, several producing fields are expected to submit revised PDOs. Reopening of fields that have been shut down may also become relevant.

New players
A total of sixteen companies were pre-qualified as licensees or operators on the Norwegian continental shelf in 2006. Another thirteen companies were being considered at year-end.

Twenty-six exploration wells were spudded in 2006. Of this total, eighteen were wildcat wells and eight were appraisal wells. Four new discoveries were made. The number of exploration wells has doubled compared with 2005. However, fewer wells were drilled than planned, largely due to a shortage of drilling rigs.

Stable resources
There is no significant change in the total estimated petroleum resources on the Norwegian continental shelf as of December 31, 2006. There has been only limited addition of new resources from exploration and zero growth in terms of gross reserves.

Data collection in Nordland VII and Troms II
The NPD will spend NOK 70 million in 2007 on collection of geophysical data in Lofoten and the Barents Sea. In 2006, the Storting (Norwegian Parliament) assigned the NPD the task of collecting data in Nordland VII and Troms II when the Management Plan (comprehensive management of the marine environment in the Barents Sea and the waters off Lofoten) was considered. This data collection will take place during the summer months.

Continued commitment to integrated operations/e-operations
The petroleum industry has made good progress in implementing integrated operations. The Norwegian Petroleum Directorate will continue its commitment to the e-driftforum (Integrated Operations Forum), and will continue to be a driving force in areas where there is insufficient activity.

New boundaries for the Norwegian shelf
During the course of 2007, the UN will define new outer boundaries for the Norwegian continental shelf. If Norway's viewpoint prevails, the Norwegian shelf will become about 250,000 square kilometers larger than it is today. The NPD was responsible for collecting the data that forms the basis for the proposed new shelf boundaries.

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