Offers for ownership interests in APA 2014

Today, 20 January, offers will be issued to 43 companies for 54 new production licences on the Norwegian continental shelf.

The offers are being issued after the authorities have evaluated applications from 47 companies in the Awards in Pre-defined Areas (APA) 2014.

Of the 54 production licences, 34 are located in the North Sea, 16 in the Norwegian Sea and four in the Barents Sea. Seventeen of the production licences are additional acreage to existing production licences. Five of the new licences are divided stratigraphically and only apply to levels below/above a defined stratigraphic boundary.

“We had record number of applications for additional acreage this year. We are pleased that the oil companies still see the potential in the Norwegian shelf and are investing heavily in mature areas,” says Sissel Eriksen, director of exploration in the Norwegian Petroleum Directorate.

“The interest was greatest for areas in the central part of the North Sea and Norwegian Sea, e.g. as a consequence of discoveries 6406/12-3 S (Pil) and 6406/12-3 A (Bue) in the Norwegian Sea. The companies have generally all delivered high-quality applications.”

She says that most companies are rewarded for their hard work, and received awards in APA 2014.

It is an advantage that the geology is so familiar, though surprises may still occur, according to the exploration director:

“Many of these areas contain existing fields at the end of their production, with infrastructure that can be exploited. It is therefore important that we are able to explore the surrounding areas so we don’t lose potential resources.”

Of the companies that applied, 43 will receive offers of 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 eleven production licences.

The offers are subject to obligations stipulated by the authorities. There is a requirement for acquisition of new seismic in five areas, and three firm wells must be drilled. 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.

From the first APA round in 2003, the APA area has been expanded several times. APA 2014 comprises a total of 202,486 square kilometres, an increase of 3,432 square kilometres from APA 2013. APA 2014 was announced on 3 April 2014. Up until the deadline of 2 September 2014, the companies could apply for 109,205 square kilometres of the total area.

Exploration director Sissel Eriksen concludes that the APA scheme works as intended. It gives the industry a predictable framework and the authorities achieve stable exploration activity and are able to realise the available resources to the benefit of the country as a whole.

Contact in the NPD:
Even Gillebo, tel. +47 51 87 64 04