Oil Companies Limiting Risk Offshore Norway
Oil companies are proceeding with caution offshore Norway, according to a new report from BMI Research.
The report outlined that the results of the country’s latest APA (Awards in Pre-defined Areas) licensing round indicate that oil companies favor the lower-risk of more mature, yet potentially less prospective, areas on the Norwegian Continental Shelf (NCS), compared to new acreage.
Norway handed out a record breaking 75 production licenses in its APA round to 34 companies last week. In comparison, Norway’s 24th licensing round offering newly opened areas received ‘relatively poor interest’, according to BMI analysts, with just 11 companies submitting applications.
BMI also highlighted that the interest of oil majors, such as ConocoPhillips and Shell, in the latest APA round suggests that the NCS remains an attractive area for companies which have traditionally had a greater appetite for more risky and capital intensive developments.
ConocoPhillips received seven exploration licenses in the APA round, with A/S Norske Shell receiving four. The other majors which took part in the round, ExxonMobil and Total, received two and three licenses respectively.
Statoil received the highest number of interests in the round with the offer of 31 exploration licenses, 17 of which were as operator, and 14 as a partner. Aker BP received the second highest at 23, and Lundin Norway AS came in third with the award of 14 license interests.
The Norwegian government aims to award new production licenses as part of the 24th licensing round in the first half of 2018.
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