Undiscovered resources

02.07.2013

Producing estimates of undiscovered resources on the NCS is a key part of the NPD’s work. These calculations are important for the choices made by government with regard to offshore exploration.

The estimates of undiscovered resources are based on the NPD’s knowledge and on information from the industry’s exploration of the NCS. Their starting point is geological mapping of areas both opened and unopened for petroleum activities. Knowledge of reservoirs already proven is also important, along with an understanding of how much of the proven resources can be recovered. This rests on the factual basis acquired by the NPD from wells, discoveries, fields, prospects and plays (see the fact box about plays).

After almost 50 years of petroleum operations, the factual basis is substantial and knowledge of petroleum geology conditions great. But large areas still exist where geological data are relatively limited. Moreover, exploration history shows that areas regarded as mature can surprise with large discoveries. Uncertainty about the size of undiscovered petroleum resources on the NCS accordingly remains high despite half-a-century of exploration.

 

Estimated undiscovered recoverable resources

The NPD calculates that 935 to 5 420 million scm oe remain to be discovered on the NCS, with an expected value of 2 980 million scm oe (see table 4.1).

 

Area Low/ P95 Expected/
average
High / P05
North Sea 485 850 1 315
Norwegian
Sea
240 780 1 795
Barents Sea 245 960 2 475
Barents Sea
South-East
55 300 565
Jan Mayen 0 90 460
NCS total 935 2 980 5 420


Table 4.1
Undiscovered recoverable resources broken down by area. The estimates are presented as the expected (average) value, low estimate (P95) and high estimate (P05) in million scm oe.

 

This estimate embraces the whole NCS with the exception of the new area in Barents Sea North-East acquired under the maritime delimitation treaty between Norway and Russia. See figure 2.1.

The NPD’s estimate of total undiscovered resources on the NCS has increased since the previous resource report was published in 2011, when the expected resource estimate was 2 570 million scm oe. It is now 410 million scm oe higher. The main reason for this rise is that undiscovered petroleum resources in Barents Sea South- East and around Jan Mayen, recently mapped by the NPD, have been included in the resource estimate. Results from the seismic mapping and the resource estimates were presented by the NPD this February. The geology of and resource estimates for these areas are described in chapter 6 and chapter 7 of this report.

Estimates of undiscovered resources are very uncertain. The uncertainty is greatest in areas with the least information and the shortest exploration history.

A preliminary aggregation and uncertainty calculation for the undiscovered resources, including Jan Mayen and Barents Sea South-East, provides an uncertainty range of 935 to 5 420 million scm oe (table 4.1). Resource estimates for the various regions, with uncertainty range, are presented in figure 4.1.

 

The estimate for undiscovered recoverable resources with its uncertainty range, broken down by the various parts of the NCS

Figure 4.1 The estimate for undiscovered recoverable resources with its uncertainty range, broken down by the various parts of the NCS.

 

The liquid potential is expected to be greatest in the North Sea, while the gas potential is highest in the Barents Sea. See figure 4.2. Should discoveries be made, gas is most likely to be found in Barents Sea South-East and oil around Jan Mayen.

 

Undiscovered recoverable resources of liquids, gas and total resources broken down between the various parts of the NCS, excluding Barents Sea North-East

Figure 4.2 Undiscovered recoverable resources of liquids, gas and total resources broken down between the various parts of the NCS, excluding Barents Sea North-East.

 

Incorporating resource estimates for the recently mapped areas raises the proportion of undiscovered resources from 19 to 21 per cent of total recoverable resources (including those produced and sold) compared with the estimate of 31 December 2012 presented in the fact box on page 10 and in the Facts 2013 publication.

 

Method for calculating possible petroleum resources

The calculation of possible petroleum resources in an area builds on a good understanding of the regional geology as well as an overview of prospects and how much petroleum each prospect might produce. Prospects are the main elements in a play. In a little-known area, uncertainty will prevail about

  • the total resources
  • the geographical distribution of the resources
  • the distribution of resources by size
  • the division between oil and gas in the resources.

Several methods are available for estimating how much oil and gas might have been formed and deposited in an area. The choice of method depends on how much is known about the area.

The NPD’s preferred method is play analysis. This involves systematising and describing the geological understanding of an area. Plays are then defined as the basis for calculating how much petroleum might be proven in and produced from each play.

Prospects provide the fundamental elements in play analysis, and the number of prospects and how much petroleum each of them might produce determines the estimated resources for the play. A prospect is a potential petroleum deposit which has been mapped and where the quantity of possible producible petroleum can be calculated. The number of possible discoveries is calculated by applying a common probability of success to the prospects in a play. This uses information from each prospect along with knowledge of the discovery success for the play. The size of possible discoveries is also assessed, based both on the estimated size of each prospect and on an evaluation of the relationship between assumed and actual discovery sizes. The likelihood that an exploration well might prove producible petroleum in the prospect is called the probability of success. New information from the seismic interpretation and drilling results are used by the NPD regularly to update and adjust its resource estimates for the relevant plays.

A play is characterised by geological factors which are simultaneously present in a clearly delineated area (basin), both stratigraphically and geographically, source rocks and a trap (see the fact box on page 29). Mapped and unmapped prospects, discoveries and fields can be found in a single play (figure 4.3).

 

The relationship between basin, play, discovery and prospect.

Figure 4.3 The relationship between basin, play, discovery and prospect.

 

Several plays of differing geological age can be found in a single geographical area – one with a reservoir rock from the Late Triassic, for example, and another from the Middle Jurassic.

Whether a play contains petroleum is uncertain until a discovery has been made in it. If producible petroleum has not been proven in a play, it is unconfirmed. Before the play is confirmed, the level of uncertainty must be taken into account. The likelihood that the play will work can be calculated by assessing the geological factors and the probability that these will work. Resource estimates rise when a play is confirmed. A confirmed play is characterised by a discovery which has proven producible petroleum. The discovery does not need to be commercial.

The less knowledge exists about a play, the more uncertain are its estimated resources. Estimated resources are specified by the NPD with an uncertainty range. Uncertainty is greatest in the Barents Sea, where exploration began in 1980. The fewest wells have been drilled there, and most plays remain unconfirmed. Exploration in the North Sea began in the mid-1960s, and uncertainty there is less because more plays have been confirmed by discoveries.

Seventy-three plays have been identified by the NPD on the NCS, of which 40 have been confirmed by discoveries. The status for plays at 31 December 2012 is presented in table 4.2. Plays in Barents Sea South-East and around Jan Mayen are not included in this analysis.

 

 

 

Status

Area

Number

Confirmed

Unconfirmed

North Sea

24

19

5

Norwegian Sea

22

11

11

Barents Sea

27

10

17

Total

73

40

33


Table 4.2
Plays defined by the NPD by area and status. A play is confirmed when a discovery has been made in it. 

 


Changes to estimated undiscovered recoverable resources from end-2010 to end-2012

The NPD regularly updates undiscovered resources on the NCS. Since the previous estimate in 2010, substantial mapping has been conducted both by the industry and by the NPD in connection with the APA and numbered rounds. Exploration results in recent years are also crucial for assessing undiscovered resources. The resource assessments for Barents Sea South-East and around Jan Mayen are not included in the estimates at 31 December 2012.

Minor changes to the estimate for undiscovered resources at 31 December 2010 were made at 31 December 2012. These showed a small increase of roughly one per cent in the expected estimate, from 2 570 million scm oe to 2 590 million. Many and to some extent large discoveries have been made since the previous analysis. Rather than reducing the volume of expected undiscovered resources, these finds provided new knowledge which has helped to increase expected undiscovered resources on the NCS (figure 4.4).

 

Comparison between the 2010 and 2012 analyses for total undiscovered resources 

Figure 4.4 Comparison between the 2010 and 2012 analyses for total undiscovered resources. The shaded area indicates the volume of discoveries since the 2010 analysis at 31 December 2012.

 


Expectations up for liquids

Little change occurred in the division between liquids and gas from 2010 to 2012. The expected value for liquids increased by six per cent, from 1 315 million scm to 1 400 million (figure 4.5). This estimate does not include Barents Sea South-East or Jan Mayen.

 

Comparison of expected undiscovered recoverable liquid resources in the three parts of the NCS and in the total area (2010 and 2012 analyses).

Figure 4.5 Comparison of expected undiscovered recoverable liquid resources in the three parts of the NCS and in the total area (2010 and 2012 analyses). The shaded areas indicate how much liquid has been found since the 2010 analysis. The potential for the whole NCS, including Barents Sea South-East (BSSE) and offshore Jan Mayen (JM), is shown in the column furthest to the right.

 

Estimated liquid volume has increased first and foremost in the North and Barents Seas. The largest change is in the North Sea, with the expected estimate up by 50 million scm oe or nine per cent from the 2010 analysis. Very little change occurred in the Norwegian Sea. Four plays in the North Sea contributed to the increase. A new play has been defined over the southern Utsira High, where several substantial discoveries have been made in recent years – including 16/2-6 Johan Sverdrup and Edvard Grieg. The NPD’s earlier plays in this area did not reflect the special depositional environment which has now been identified in this part of the Utsira High. Embracing rocks ranging from the basement to the Cretaceous, the play is expected to contain mostly oil.

Following discoveries in the Upper Triassic to Middle Jurassic play in the northern North Sea over the past five years, expectations for the liquid/gas ratio have been adjusted and the probability of finding liquids has risen.

In addition, the number of prospects in two Upper Jurassic plays has been increased. One of these plays is in the north-eastern North Sea, where such discoveries as 35/9-8 (Skarfjell) have generated optimism and led to several new prospects being mapped. The other is at the southern end of Norway’s North Sea sector, where several new prospects have also been mapped following discoveries such as 8/10-4 S (Butch) and 2/4-21 (King Lear), which all help to boost expectations.

Expectations for liquids in the Barents Sea have risen by 25 million scm (six per cent) from 2010. This increase primarily reflects a reassessment of the Lower to Middle Jurassic play, which contains the Johan Castberg (7220/8-1 Skrugard and 7220/7-1 Havis) oil discovery. It was earlier assumed that this play largely contained gas and that reservoir quality was poorer than the wells have demonstrated. The play has now been revised, and is expected to be three times larger with a higher oil potential. In addition, the potential in the overlying Upper Jurassic to Lower Cretaceous play has been upgraded for both liquids and gas.

 

Liquid resources including Barents Sea South-East and around Jan Mayen

Resource estimates for Barents Sea South-East and around Jan Mayen (see chapter 6 and chapter 7) provide a new figure for the total resources in the Barents and Norwegian Seas. The expected value for liquids has risen by 8.6 per cent, from 1 400 million scm at 31 December 2012 to 1 520 million scm (figure 4.4).

The increase in the expected value for total liquid resources breaks down into 50 million scm in Barents Sea South-East and 70 million scm around Jan Mayen.

 

Expectations down for gas

The estimate for expected undiscovered gas resources on the NCS has been reduced by 65 billion scm or five per cent (figure 4.6). This figure does not include Barents Sea South-East and Jan Mayen.

 

Comparison of expected undiscovered recoverable gas resources in the three parts of the NCS and in the total area (2010 and 2012 analyses).

Figure 4.6 Comparison of expected undiscovered recoverable gas resources in the three parts of the NCS and in the total area (2010 and 2012 analyses). The shaded areas indicate how much gas has been found since the 2010 analysis. The potential for the entire NCS, including Barents Sea South-East (BSSE) and offshore Jan Mayen (JM), is shown in the column furthest to the right.

 

In the North Sea, the estimate for expected undiscovered gas resources has been reduced by 16 per cent in the 2012 analysis, from 280 million scm oe to 235 million. This is because a greater expectation of liquids in some plays has reduced the expectation of gas in the same plays.

The position in the Norwegian Sea is virtually unchanged, with a small reduction of two per cent in expectations for gas.

A two per cent reduction from the 2010 analysis has also been made in the Barents Sea.

 

Gas resources including Barents Sea South-East and around Jan Mayen

Resource estimates for Barents Sea South-East and around Jan Mayen (see chapter 6 and chapter 7) provide a new figure for total resources in the Barents and Norwegian Seas. The expected value for gas has risen by 23 per cent from the estimate of 1 190 million scm oe at 31 December 2012 to 1 460 million (figure 4.5).

The increase in the expected value for total gas resources breaks down into 250 million scm oe in Barents Sea South-East and 20 million scm oe around Jan Mayen.