GEO ExPro

Incredibly Cheap

A total of 45 production licenses were just recently awarded in mature areas on the Norwegian continental shelf. The companies have been offered participating interests in 73 blocks or parts of blocks, and 26 companies – including a few of the supermajors – have in this way expanded their acreage portifolio in the North Sea and on the Halten Terrace in the Norwegian Sea.
This article appeared in Vol. 3, No. 1 - 2006

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The Norwegian authorities say they are pleased with the interest. The many offers demonstrate that mature areas on the Norwegian shelf are very attractive internationally, and that there are still plenty of opportunities offshore Norway despite few discoveries the past few years. The result is more extensive exploration activity, something which is necessary in order to make sure that the resources are exploited in the best possible way, according to the Minister of Petroleum and Energy Odd Roger Enoksen.  

The APA-system (Awards in Predefined Areas) was introduced in 2003, with the purpose of encouraging more efficient exploration of the mature regions. Companies receiving APA acreage must commit to a faster exploration of the acreage than has been or is normal in Norway's traditional licensing rounds. They also have less time to assess whether they want to drill or develop possible finds than has been usual. Acreage must be relinquished if it is not to be developed.  

The awards are all in mature areas, i.e. within geological provinces with a proven petroleum system characterised by many discoveries and several producing fields. The geological, technical and political risks are all small. Also, it is noteworthy that the work commitment on all but two licenses does not include the drilling of an exploration well.  

Companies wanting to get access to low risk acreage should look upon the APA-system as an excellent opportunity to both improve their acreage situation and increase their oil and gas reserves. Compared with many other offers – inside as well as outside Norway –the APA system offer incredibly cheap opportunities.

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