A record number of fields are in operation on the Norwegian shelf. Discoveries in 2013 offset roughly half of what was produced in the same year, the Norwegian Petroleum Directorate said in a statement on Tuesday.
An unprecedented number of wildcat wells were drilled, and the number of exploration wells recorded was the second highest ever.
A record number of fields are in operation on the Norwegian shelf. Discoveries in 2013 offset roughly half of what was produced in the same year. An unprecedented number of wildcat wells were drilled, and the number of exploration wells recorded was the second highest ever.
Twenty new discoveries were made in 2013, which is seven more than in the previous year. Once again, exploration activity was highest in the North Sea where a total of seven oil and gas deposits were proven. Eight discoveries were made in the Norwegian Sea, and five in the Barents Sea. The resources in the new discoveries amount to between 50-106 million standard cubic metres (Sm3) of oil and between 30-58 billion Sm3 of recoverable gas.
In the past year, the Norwegian Petroleum Directorate presented the results of its mapping of the south-eastern Barents Sea, which was opened for petroleum activity.
“The discoveries in recent years have created renewed interest in the Barents Sea, which could come to play an important role in maintaining long-term petroleum production,” says director general Bente Nyland.
A total of 213.7 million Sm³ oil equivalents (o.e.) were produced in 2013. This is 49.8 million less than in the record year 2004, and 4.9 per cent less than in 2012. Oil production continued to fall, and the decline in gas sales was as expected after the unusually high level in 2012.
Total estimated production of petroleum in 2014 is 215 million Sm³ o.e., about a half per cent higher than in 2013. After this, a weak decline is expected over the next decade.
Four new fields came on stream in 2013, and 13 fields are currently being developed on the shelf. The oil companies plan to submit another 13 plans for development and operation (PDOs) over the next two years. Nine of these could come in the North Sea, three in the Norwegian Sea and one in the Barents Sea, where no PDO has been approved since the Goliat development in 2009.
The high level of activity in the petroleum sector is expected to continue, but growth will stop. Investments for 2014 are expected to reach NOK 176 billion, 3 billion more than the preliminary figure for 2013. Investments are then expected to increase to around NOK 180 billion in 2015, and then remain stable around NOK 170 billion up to 2018.
Up to the present, the growth has been a result of higher activity and a substantial cost increase in various supplier markets. However, the high cost level and uncertainty surrounding future oil and gas prices entail a considerable challenge for the development of the Norwegian shelf.
Bente Nyland believes that the oil industry will face many challenges in the years to come. She also emphasises that the Norwegian Petroleum Directorate’s commitment to produce all profitable resources will become increasingly important.
“The work to coordinate the resources and improve the recovery rate on the shelf has greatly benefitted both the companies and the Norwegian State,” she says.
“Concerns over the cost level and oil prices must not prevent us from making decisions that will secure our income base for many years to come.”
1 Norwegian krone = 0.163787 U.S. dollars
Press Release, January 15, 2014