Introduction and summary


Half a century has passed this year since Norway extended its sovreign rights over the NCS and the government gave, on a general basis, interested parties permission to conduct geophysical surveys there.

Seismic data acquisition on the NCS then got going in earnest, with a gradual start to this work in early 1963. The very first exploration well was spudded three years later. That proved to be dry, but a strike was made as early as the second wildcat without it being considered commercially interesting at the time. This was the discovery well for the Balder oil field, which came on stream in 1999.

It took 27 wildcats on the NCS before the first commercial discovery – Ekofisk – was announced in December 1969. When its size became known, exploring the NCS became very attractive for the oil companies and a number of big discoveries were made over the next 15 years. The bulk of the resources found on the NCS were proven in this period. See figure 1.1, which presents the growth in proven resources from drilling wildcats.


Resource growth on the NCS, 1966-2012


Figure 1.1 Resource growth on the NCS, 1966-2012.


The big discoveries were further apart after 1986, even though exploration activity was generally high. Interest in exploring the NCS declined markedly from 1997, and only 12 exploration wells were spudded in 2005.

Rising oil prices and exploration policy changes helped to reverse this trend, and several substantial discoveries have been made in recent years, such as 16/2-6 Johan Sverdrup in the North Sea and Johan Castberg (7220/8-1 Skrugard and 7220/7-1 Havis) in the Barents Sea. Considerable knowledge of mature areas, combined with diversity and new solutions plus a willingness to accept risk, have yielded good results. Exploration optimism has therefore been high over the past couple of years.

Although increased knowledge and greater diversity could yield further discoveries in mature areas, substantially more or larger finds are needed if production on the NCS is to be maintained at a high level – which is an important political goal in White Paper 28 (2010-2011), the most recent policy document on the petroleum sector. This underlines the long-term nature of the industry and – in addition to a high level of exploration activity – gives emphasis to the need to concentrate more strongly on producing fields, to bring discoveries on stream and to make provision for opening new areas.

The NPD believes that substantial resources remain to be found. Combined with resources in discoveries and improved recovery from producing fields, these could lay the basis for profitable production from the NCS for a long time beyond 2030 – as shown in Figure 1.2. How long production can be maintained depends on several factors, including resources, technological advances, cost developments, the player picture, political operating parameters and the price of oil and gas in relation to other energy carriers.


Resource growth on the NCS, historical and expected, 2007-30

Figure 1. 2 Resource growth on the NCS,
historical and expected, 2007-30.


Active exploration is essential if undiscovered resources are to contribute to production and create value both for the industry and for society. Through its exploration policy, the government has provided the companies with a great deal of exploration acreage in both mature and frontier areas. This has so far yielded good results. Exploration activity on the NCS has been high, particularly over the past five years, and several major discoveries have been made. Chapter 2 presents the development and results of exploration activity, with the emphasis on trends over the past 15 years.

A diversity of participants is important in achieving the highest possible value creation for society from the petroleum industry. The number of players has increased substantially since 2000, when the government introduced policy changes at a time of low exploration activity. Chapter 3 presents the contribution of the players over the past 15 years. The analyses show that the player picture has become more diversified and that all company categories have contributed positively to both exploration activity and results. Along with large Norwegian companies, medium-sized companies have been responsible for the biggest investment in exploration over the past 15 years. This growth is one reason why the medium-sized companies appear to be taking over the position held by the integrated international oil companies on the NCS since activities began there almost 50 years ago.

Chapter 4 presents an updated estimated of total undiscovered resources on the NCS at 31 December 2012. See the box on the resource account. In addition comes a resource estimate for Barents Sea South-East and the offshore area around Jan Mayen.

Much oil and gas remains to be discovered on the NCS. Considerable knowledge of the geology is essential if the authorities are to be able to play a key role in resource management. A good factual foundation and knowledge of geology help to reduce exploration risk and costs on the NCS. Even though major discoveries have been made in recent years, the estimate of undiscovered resources has risen because new knowledge gives greater confidence in the opportunities of finding more.

Chapter 5 describes the estimate for undiscovered reserves in a geographic area and for selected plays in connection with the exploration history of the area or play. Relationships are established in the form of a rising curve which shows how the area or play has been explored. A steep curve means that exploration activity has been a success in that considerable resources have been proven with few wildcats, while a shallow curve means that exploration activity has been more challenging and has yielded limited resources with many wildcats. Viewed in relation to the estimate for undiscovered resources, these curves can illustrate the remaining potential in the various plays and offshore areas. The final part of the report describes the geology of and provides a resource evaluation for the unopened areas in Barents Sea South-East (chapter 6) and around Jan Mayen (chapter 7). Substantial efforts have been devoted by the NPD in recent years to geological mapping and interpretation of these offshore areas. Mapping of Barents Sea South-East forms part of the factual base in the process of opening for petroleum activities. In the NPD’s assessment, this is an area with structures which could contain substantial petroleum resources. Expected recoverable resources are estimated to be about 300 million standard cubic metres of oil equivalent (scm oe), with an upside of about 565 million scm oe. An opening process has also been initiated in the Jan Mayen area. The NPD is due to submit an updated evaluation of resources around the island in the spring of 2014. The status of the work and a preliminary resource estimate are presented in this report. A preliminary estimate of expected recoverable resources amounts to some 90 million scm oe, with an upside of about 460 million scm oe.


Resource classification



Classification of resources

The resource classification covers all estimated petroleum resources, both discovered and undiscovered. Petroleum volumes are classified by their maturity.

Resources are divided into the principal classes of historical production, reserves, contingent resources and undiscovered resources. Reserves relate to remaining recoverable petroleum resources in deposits which the licensees have decided to develop. Contingent resources are discovered petroleum volumes still not covered by a development decision. Undiscovered resources are volumes considered to be recoverable but not yet proven by drilling. Whether the estimated resources actually exist is uncertain. The various main classes are divided into sub-categories depending on the maturity of the various projects.




Resource account

The NPD’s resource account provides an overview of expected total recoverable petroleum resources, including those still to be discovered. The account at 31 December 2012, which was presented in the Facts 2013 publication, covers all parts of the NCS with the exception of the continental shelf around Jan Mayen and Barents Sea East. Other areas not currently open for petroleum activities are included in the account.

Based on the NPD’s resource classification, the account builds on data reported from the operator companies, the NPD’s own assessments of fields and discoveries, and its estimate of undiscovered resources.

Six billion scm oe had been sold and delivered at 31 December 2012, or roughly 44 per cent of expected recoverable resources. Total recoverable resources are estimated to lie within an uncertainty range (P10 and P90) of 10.4-16.4 billion scm oe, with an expected value of 13.6 billion scm. See the figure.

The resource account at 31 December 2012 was drawn up before mapping of the continental shelf around Jan Mayen and the southern part of Barents Sea East (Barents Sea South-East) had been completed by the NPD. See chapter 6 and chapter 7. Chapter 4 provides an updated estimate of undiscovered resources on the NCS, including resource estimates for the recently mapped areas. Barents Sea North-East has yet to be mapped, and is accordingly not included in the new resource estimate. The inclusion of resource estimates for Jan Mayen and Barents Sea South-East helped to increase undiscovered resources as a proportion of total recoverable resources (including petroleum produced and sold) from 19 to 21 per cent compared with the estimate at 31 December 2012.