Nearly 40 companies have applied for new production licences on the Norwegian Continental Shelf, indicating there is still considerable interest in the sector according to country’s petroleum directorate.
The Norwegian Petroleum Directorate is offering licences to 37 companies following the assessment of applications of 43 companies in the awards in pre-defined areas (APA) 2015.
“The number of applications has remained fairly constant in recent years. We are pleased that the oil companies still see the potential in the Norwegian shelf and are investing heavily in mature areas,” said Sissel Eriksen, NPD’S director of exploration.
He added: “Interest has been particularly great in the Norwegian Sea. The companies’ applications show consistent high quality, and some have submitted very interesting exploration concepts. Most of the companies will be rewarded for their hard work through awards in APA 2015.”
Of the 56 production licences, 27 are in the North Sea, 24 in the Norwegian Sea and five in the Barents Sea.
Fourteen of the production licences are additional acreage for existing production licences. Five of the new licences are divided stratigraphically and apply only to levels below/above a defined stratigraphic boundary.
Many of the areas have existing fields that are nearing the end of production, with infrastructure that can be exploited.
“It is therefore important that we explore the surrounding areas so that potential resources are not lost,” said Eriksen.
Of the companies that applied, 37 will be offered ownership interests in at least one production licence. Petoro will participate as a licensee and will manage the State’s Direct Financial Interest (SDFI) in thirteen production licences.
The offers are subject to obligations stipulated by the authorities inlcuding acquisition of new seismic in four areas, and the drilling of two firm wells.
For the other production licences there are “drill or drop” conditions. This means that the licensees have between one and three years to decide whether they want to drill an exploration well. If they do not wish to drill an exploration well, the production licence lapses.
The APA area has been expanded several times since the first APA round in 2003. APA 2015 comprises a total of 220,635 square kilometres, an increase of 18,403 square kilometres from APA 2014.
APA 2015 was announced on 21 April 2015. Up until the deadline of 2 September 2015, the companies could apply for 127 608 square kilometres of the total area.
Eriksen said the APA scheme functions well and as intended, giving the industry a predictable framework while the authorities achieve their objective of more rapid turnover of acreage and stable exploration activity.