Resource report 2005

2005
20.06.2005
The Norwegian Petroleum Directorate announces publication of the report entitled The petroleum resources on the Norwegian continental shelf 2005. 

The Resource Report highlights issues such as the importance of a high rate of exploration activity, improved recovery and focus on efficient operations methods for future value creation.  The report also announces a new and ambitious goal for production of oil on the Norwegian continental shelf.

In the new Resource Report, the Norwegian Petroleum Directorate (NPD) maintains its high estimate for the resources on the Norwegian continental shelf.  The total recoverable oil and gas resources are expected to be 12.9 billion standard cubic meters (Sm3) oil equivalents.  The figures are uncertain, and vary between a high estimate and a low estimate (10.6 and 16.3 billion Sm3 o.e.)

Exploration and more discoveries are preconditions for maintaining a high level of production in the future.  The oil companies continue to show considerable interest in the Norwegian shelf, and the authorities have an active exploration policy which provides good opportunities for access to exploration acreage, both in mature and less mature areas.  In recent years, a number of new players have been approved as licensees or operators on the Norwegian continental shelf.  The licence award scenario in recent years shows that an increasing number of production licences are awarded to the new companies.  The authorities expect that these companies will play an ever greater role on the continental shelf in the years to come.

The work of extracting as much as possible from the fields in a profitable manner is one of the greatest and most important challenges on the Norwegian continental shelf.  The Resource Report 2005 introduces a new and ambitious goal for production of oil.  The goal is an increase of the oil reserves over the next ten years of five billion barrels, or 800 million Sm3. Reserves are resources that are currently in production or for which there are approved production plans.  Today's forecast presumes that approx. 580 million Sm3 oil will be approved during the course of the next ten-year period.  The new goal entails an additional growth of 220 million Sm3 in addition to this forecast.  Achieving this goal will require a number of new measures for increased oil production from the major fields, many new discoveries in production and a high level of exploration activity.

The Norwegian Petroleum Directorate estimates that 180-220 million Sm3 more oil and condensate have been produced due to injection of gas in the fields on the Norwegian continental shelf, than would have been the case without gas injection.  Up to the end of 2004, a total of 413 billion Sm³ gas had been injected on the Norwegian continental shelf.  In recent years, 35-40 billion Sm³ gas per year has been injected.  Most of the gas that is injected will be produced and sold later.

The Resource Report 2005 has considerable focus on cost-effective operations.  Measures must be implemented in order to operate the fields more efficiently.  In addition, there must be a greater awareness of the cost and resource consequences of the various demands the authorities place on the industry.  The operating costs for the facilities on the Norwegian continental shelf account for an increasing share of the total costs, and streamlining operations will be a key to both higher recovery, as well as meeting rising unit costs.

A cost study based on a representative selection of eight facilities indicates a potential for cost reductions of about 30 percent, which can be achieved by utilising experience gained on other fields.