GEO ExPro

Still High Interest for Norwegian Acreage

Altogether 93 applications were received when the APA and 20th licensing rounds were closed in October and November respectively, proving that there is still a strong interest in exploring for oil and gas both in mature and frontier areas offshore Norway.
This article appeared in Vol. 5, No. 6 - 2008

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The Norwegian continental shelf is divided into the North Sea, the Norwegian Sea and the Barents Sea. By the deadline on October 3, the Norwegian Ministry of Petroleum and Energy (MPE) had received applications from 47 companies in predefined areas (APA) on the Norwegian continental shelf (NCS). Among the applicants we find multinational giants (including ExxonMobil and Shell), several intermediate international majors (for example, BG and Talisman), many small Norwegian companies and also newcomers on the NCS that together clearly reflect the present diversity amongst companies exploring offshore Norway. The Purpose of the APA-arrangement (Awards in Predefined Areas) is to encourage exploration activity in mature areas (see following story: "Q&A"). The scheme is intended to ensure that the industry can explore areas close to existing and planned infrastructure, and thus contribute to good utilisation of production and transport capacity on the shelf.

One month after the APA deadline, on the November 7 deadline for applications in the 20th licensing round, the Ministry had received another 46 applications from qualified companies. For the first time, the Ministry has, as part of its new openness policy, now made public which of the announced blocks that the companies have applied for.

An ordinary licensing round starts when the MPE invites the oil companies to nominate blocks which they believe should be included in the announcement. After a thorough review, the MPE - with input from the Norwegian Petroleum Directorate (NPD) - prepares a list of blocks that the agencies want to include in the licensing round. Following consultation and negotiations with parties including the fishery and environmental authorities, the MPE announces which of the blocks the companies can apply for and have production licences, including any special environmental and/or fishery conditions that apply to such blocks. Companies can apply individually or as part of a group

In the 20th licensing round, the Norwegian Government had chosen to announce 51 blocks in the Norwegian Sea and 28 blocks in the Barents Sea. The preparations for this round started at the end of October 2007 when MPE invited the oil companies to nominate blocks that they believed should be included in the announcement. The deadline for nominations was 15th January 2008.

In line with the Government's desire to have an open petroleum policy, the NPD's recommendation for the 20th licensing round was subject to broad public consultation. When the deadline fell on 23 May 2008, 55 of 148 companies/organisations responded to the consultation letter. On 27 June, the MPE announced the 79 blocks or parts of blocks that make up production licences that the companies could apply for, as well as the environmental and fishery conditions linked to the various blocks. The NPD itself has thoroughly mapped all of the announced blocks.

The Ministry aims to award new production licenses for APA 2008 early in 2009 and for the 20th licensing round in spring 2009.

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