GEO ExPro

New Acreage in Frontier Provinces

In June, 29 companies were awarded frontier acreage in the Norwegian and Barents Seas offshore Norway.
This article appeared in Vol. 10, No. 4 - 2013

Advertisement

Minister of Petroleum and Energy, Ola Borten Moe, was very pleased with the strong interest in the 22nd round offshore Norway, which resulted in 24 new licenses, 20 in the Barents Sea and four in the Norwegian Sea. Source: Berit Roald/Scanpix The 1st licensing round on the Norwegian continental shelf (NCS) was concluded in 1965. It took almost 50 years to reach the 22nd round, which includes previously unoffered acreage in the extreme north of the country.

The first round comprised all 278 blocks in the North Sea sector (south of 62°N), with the exception of those closest to the boundary with the Swedish and Danish continental shelves. The Ministry received only 11 applications, covering 208 of the announced blocks. A total of 22 licenses were awarded for 78 blocks, making this the most comprehensive licensing round off Norway to date.

Four years later the first round resulted in Norway’s most famous and first commercial oil field: Ekofisk. Contrary to common belief that the find was made the day before Christmas, the drill bit actually hit highly porous and fractured chalk with exceptionally bright, yellow fluorescence on October 25, 1969. “I thought we had hit a gold mine, not an oil reservoir”, said Max Melli (GEO ExPro, Vol. 8, No. 1), who was well site geologist on well 2/4-2 for Phillips Petroleum that fall. Only two years later, Ekofisk came on stream, based on four wells, and Norway was an oil-producing country.

More than 900 wildcats later, with 88 producing fields (including 12 where production has ceased) and 30 discoveries under development or to be developed, the NCS still attracts minor, major and supermajor oil companies.

Medium-sized Companies Predominate

The 22nd licensing round was announced on June 26, 2012, and comprised 86 blocks in the Barents Sea and Norwegian Sea. By the application deadline on December 4, 2012, a total of 36 companies had applied for production licenses.

Some of the supermajors have already given up on exploring the frontier areas offshore Norway, due to lack of recent success, but ConocoPhillips, Eni, Shell Total and Russian company Lukoil (for the first time) were amongst the 14 companies that were awarded operatorship in the 22nd round. A notable exception is ExxonMobil, which still has reserves of some 500 MMboe elsewhere offshore Norway.

In the newly issued resource report, the Norwegian Petroleum Directorate (NPD) presents analyses showing that the medium-sized companies are strengthening their position on the Norwegian shelf, including four major German gas companies. It looks as if these organizations are about to take over the position that the integrated international oil companies have had on the shelf since the very beginning.

“This confirms that the Norwegian Continental Shelf is a highly interesting petroleum province,” said Minister of Petroleum and Energy Ola Borten Moe upon release of the 22nd round results in June.

“There is still a lot of oil and gas to discover in the North Sea, Norwegian Sea and Barents Sea,” confirms Sissel Eriksen, director of exploration in NPD, well aware that Lundin Petroleum discovered a giant in the North Sea in 2010 (GEO ExPro, Vol. 8, No. 5).

The 22nd round, unlike the 1st round, did not include the North Sea. Acreage made available was either in the Norwegian Sea or in the Barents Sea, as most of the North Sea is considered mature. This acreage is offered on a yearly basis in the APA-rounds (Awards in Predefined Areas).

It was no surprise that the Barents Sea turned out to be more popular than the Norwegian Sea. The reason for this is that deepwater wells in the Norwegian Sea have been largely disappointing, while several recent finds in the Barents Sea, notably Skrugard and Havis, now known as Johan Castberg (GEO ExPRo, Vol. 9, No. 2), have upgraded the resource potential and given rise to great optimism.

Service companies specializing in multi-client seismic know all about this. The competition has been fierce, with multiple 2D and 3D programmes, some of them overlapping.

Advertisement

Related Articles