The offers sent out to the companies include a total of 48 production licenses covering 85 blocks or parts of blocks. This is the highest number of licenses ever offered on the Norwegian continental shelf.
The APA rounds have turned out to be very successful in increasing the activity on the shelf. Every year since APA started in 2003, the number of applicants, production licenses and acreage awarded have increased.
There is a large potential in proving new, smaller resources close to existing infrastructure in the mature areas of the North Sea, the Norwegian Sea and the Barents Sea. This explains the extensive interest for the APA rounds.
The Ministry of Petroleum and Energy has laid down conditions for a rapid exploration and progress towards a possible PDO for the potential resources to be found in the licenses, to ensure an effective exploration of oil and gas in the mature areas on the shelf. This is important to utilize the capacity of existing and planned production and transportation installations.
The APA produces opportunities for new, smaller companies on the shelf, very apparent in this licensing round. Of the 33 companies being offered licenses, 8 companies are new on the Norwegian continental shelf.
In addition to offering the 48 production licenses, up to 10 additional licenses can be offered. Before these possible offers can be made, some issues concerning the organization of certain companies need to be solved. The offers may be given during the first six months of 2007, and can increase the number of companies in this licensing round.
The increased number of interested companies have focused on new areas that otherwise would not get enough attention, and the competition for acreage has increased.
Several companies have shown interest for the APA area in the Barents Sea. Also this area needs increased exploration activity and an increased number of companies to offer new ideas and resources.
The production licenses are divided between the North Sea (34) the Norwegian Sea (12) and the Barents Sea (2).
Announcing the APA 2007
The Government wants to give the industry access to new, prospective acreage. It is important to develop the Barents Sea as a petroleum province, and I have chosen to prioritize an expansion in this sea in the APA 2007, says Odd Roger Enoksen, Minister of Petroleum and Energy.
Thirteen new blocks or parts of blocks have been made available for the industry. Permitting additional discoveries and exploration of additional resources in the Barents Sea will promote a positive development of the infrastructure in the mature parts of this sea, and contribute to value creation. The APA area in the Barents Sea has not been expanded since TFO 2004.
The integrated management plan for the Barents Sea has given the framework for the petroleum activities in the area. The expansion of the APA area are in line with the conclusions in the management plan, and new exploration licenses will be subject to strict conditions regarding the environment and the fishery.
The predefined area in the North Sea and the Norwegian Sea will not be expanded in this APA round. The Co-existence group II-2 will evaluate conditions relating to environmental concerns and fishery interests for the petroleum activity in the North Sea and the Norwegian Sea. The group will present its report in summer 2007. The Government wants to await expansions of the APA area in these seas until the evaluation has been presented.
The deadline for applications is September 28, 2007 at noon. The plan is to award the licenses late 2007/early 2008.
Awards in the 20th Licensing Round is postponed to 2009
The Cabinet has decided to postpone the 20th Licensing Round with one year, to ensure cost-efficient exploration of frontier areas on the Norwegian Continental Shelf.
The Norwegian authorities have organized frequent and extensive licensing rounds in recent years, and a record-high number of new licenses have been awarded. High exploration activity in the coming years will be the result. Many of the exploration wells will be drilled in the same areas that can be included in the announcement of a 20th Licensing Round. These wells will provide the Norwegian authorities with information that is vital for planning the round. A premature award of new licenses will increase the potential for unnecessary, dry holes.
Value creation is a central issue in Norwegian oil and gas policy. The Cabinet wishes to promote cost-efficient exploration, and it has always emphasized a step-by-step approach to exploring frontier parts of the Norwegian continental shelf. This has resulted in a high success rate for the exploration activities. At the same time, access to sufficient acreage is important for the Norwegian government, to bring about a high exploration effort and to prove new oil and gas resources. The aim of a well defined licensing policy is therefore to organize licensing rounds with a scale and tempo that secures the right activity level, cost-efficiency and high value creation.
A postponement of the round by one year will provide the needed time for evaluating new information, and at the same time attend to the petroleum industry's desire for predictability.
With the new time schedule, the 20th Licensing Round will be announced in 2008, and new licenses will be awarded in 2009. The Ministry of Petroleum and Energy will invite the oil companies to nominate new blocks for the 20th Licensing Round in the second half of 2007.
Offer to 19 operators: (number of operatorships in parenthesis)
Offer to 33 companies: (number of shares, included where the companies are operators, in parenthesis)
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