Exploration Country Focus - coordinated by Karen Wagner
The petroleum activity at the Norwegian continental shelf has been opened in stages since 1965 and follows the principles of sequential exploration as well as avoidance of environmental risks. Sequential exploration means that results and experience gained from one area are thus utilised to open new areas. Information that is already available is always used for future exploration. This avoids drilling unnecessary wells. Work takes place for many years before the Norwegian Parliament decides which areas are to be opened for petroleum activity. The authorities (Norwegian Petroleum Directorate – NPD - http://www.npd.no/en/) gather seismic data and undertake shallow drilling, mapping and assessment of potential areas, mainly to select the most prospective ones, which can then be made available to the industry. The assessment of environmental impacts is mandatory during the general procedure of opening new exploration areas and is stated in $ 3.1 of The 1985 Petroleum Act. Herein is regulated that prior to the opening of new areas with a view to granting production licenses, an evaluation shall be undertaken of the various interests involved in the relevant area. In addition, it shall be made known through public announcement which areas are planned to be opened for petroleum activities, and the nature and extent of the activities in question. Interested parties shall be given a period of time of no less than 3 months to present their views. The Ministry decides on the administrative procedure to be followed in each individual case. Since 1965 twenty licensing rounds of various extents have taken place. The number of pre-qualified companies on the Norwegian shelf has risen from 34 in 2004 to 79 in 2008, reflecting a great interest in the potential of the Norwegian shelf.
A characteristic in Norwegian petroleum activity is the scheme for Awards in Predefined Areas (APA). Within the areas that have been opened for petroleum activity through licensing rounds, companies can also obtain acreage by purchasing or exchanging shares in production licenses. The purpose behind the APA is to prove resources close to planned and existing infrastructures to be able to produce them efficiently before the infrastructures cease to be used. In addition, predictability in the awarding of acreage is important. The APA scheme also simplifies the procedure for new companies wishing to take part in activities on the Norwegian shelf. The APA scheme has, according to the NPD, led to:
- Increased and more rapid exploration of mature areas • more new companies contribute to the exploration of the Norwegian shelf
- The industry is assured regular access to prospective acreage
- More rapid relinquishment of acreage to the authorities
- More predictability through more regular awards
The Ministry of petroleum and energy has 19 February 2010 announced the APA 2010, comprising the predefined areas with blocks in the North Sea, the Norwegian Sea and the Barents Sea. The application deadline is mid September 2010. Awards are planned at the turn of the next year.
The companies were invited to nominate blocks on 5 November 2009. In keeping with the routine followed in recent licensing rounds, the companies were encouraged to restrict the number of nominated blocks to the 15 blocks they found most interesting. The Ministry of Petroleum and Energy has received proposals from 43 companies regarding which blocks the companies believe should be included in the upcoming licensing round on the Norwegian shelf. 46 companies nominated blocks in the previous 20th licensing round. This year, 307 blocks or parts of blocks have been nominated, with 138 blocks being nominated by two or more companies. The oil companies have thus had an opportunity to nominate the blocks they find interesting. Now the Norwegian authorities will prepare a proposal for which blocks will be announced. This proposal will be subject to a public consultation process, where all stakeholders will be invited to give their opinion. The Government will then decide which blocks should be announced, based on an overall evaluation. The plan calls for the announcement of the 21st licensing round before this summer. Licence awards are scheduled for the spring of 2011.