An All Time High

The Ministry of Petroleum and Energy in Norway has recently received 93 applications for acreage on the Norwegian continental shelf. We have talked to Sissel Eriksen of the Norwegian Petroleum Directorate about the future exploration offshore Norway.
This article appeared in Vol. 5, No. 6 - 2008


Sissel Eriksen is a geologist by profession with a Masters degree from the University of Oslo in Norway (1987). She joined the Norwegian Petroleum Directorate as a student in 1985. Since then she has been involved in both exploration and production and has been exposed to the entire Norwegian continental shelf, including the North Sea, the Norwegian Sea and the Barents Sea. In September 2007, Sissel Eriksen was appointed Director for Exploration. Photo: Halfdan Carstens
A total of 93 applications in the two rounds combined is an all time high. What does that suggest?  

Firstly, the high level of interest shows that the APA system contributes to efficient exploration of the shelf, in line with the authorities' intentions. The interest shown by the companies confirms that they still find mature areas on the Norwegian shelf attractive. Secondly, the 20th round [the latest] is one of the largest licensing rounds ever in terms of acreage included. The companies' interest thus shows that new exploration areas on the Norwegian shelf are competitive from an international perspective.

What is the main purpose of the annual APA arrangement?

The purpose is to encourage exploration activity in mature areas where we expect smaller discoveries that do not justify an independent development. It is therefore prudent resource management to discover and develop these resources before existing infrastructure connected to other fields is shut down. We now experience that the interest in awards in predefined areas in the North Sea, the Norwegian Sea and the Barents Sea remains high, six years after the system was established in 2003. More new players have also applied this year.

Do you consider the APA arrangement a success?

Yes, without hesitation, as we have received an increasing number of applications since we started out in 2003. Moreover, following a few years lead time, we now start to make new discoveries. Part of the good news is that many of the newcomers on the continental shelf are involved.  

What are the main criteria for allocating blocks to an applicant, either APA or in a licensing round?  

Companies that are awarded production licenses must possess technical expertise and a good understanding of the area's geology. In addition, emphasis is placed on financial strength and experience. We seek to find the best strategy for exploring the areas, and therefore look for companies with the best knowledge and the best applications. We also evaluate their proposals for working programmes that need to fulfil our requirement for optimal exploration of the continental shelf.  

In what way do you prepare yourself for evaluating applications from such a huge number of highly qualified companies and skilled geoscientists?  

We have ourselves, including some 30 geoscientists, thoroughly mapped all of the announced blocks as if we were to apply for acreage ourselves, the reason being that it is necessary for us to have a proper understanding of the geology and the prospectivity before we start evaluating the applications. Even if we have the very best database, better than any oil company, as we have access to all the available data, we do not always have the correct answer. We must keep an open mind and respect the companies' own ideas. They have experts and knowledge that we need to take into account when evaluating their applications.

Finally, Sissel, do you find your new position as Director for Exploration rewarding?

Definitely! There are plenty of challenges to deal with, and we need to look at what we are doing in a wider perspective. It doesn't pay to be narrow-minded. I also enjoy the responsibilities and the fact that what I do may have an impact. Finally, I certainly appreciate the opportunity to have fun - which I have.


Related Articles

Q&A Europe

Let’s Talk About Shale

Ken Cronin is CEO of UKOOG, which represents the onshore oil and gas industry in the UK, and is therefore heavily involved in ongoing discussions about unconventional exploration in the country.