The petroleum resource account as of Dec. 31, 2003

An updated resource account with estimates of both produced and remaining resources on the Norwegian continental shelf, shows that there is more than 9,1 billion Sm3 oil equivalents left to be produced. This in more than twice as much as has been produced so far.

The Norwegian Petroleum Directorate's (NPD's) resource account is an overview of the recoverable petroleum resources on the Norwegian continental shelf. Recoverable petroleum resources consist of both the original marketable and the remaining petroleum resources. The resource estimates are based on reports submitted annually by the operating companies, NPD evaluations for fields and discoveries and NPD estimates of undiscovered resources.

The resources on the Norwegian continental shelf are classified according to maturity as shown in the NPD's resource classification system, reflecting the maturity, or project status, with regard to decisions to develop and produce the discovered petroleum quantities.

The total recoverable petroleum resources on the Norwegian Shelf as of December 31, 2002 are estimated to 12.9 billion Sm3 oil equivalents (Sm3 o.e.). This is a reduction of 830 million Sm3 o.e. compared to the previous annual report.

There are two main reasons for this reduction: The NPD downgraded it's estimate of the undiscovered resources by 530 million Sm3 to 3400 million Sm3 o.e. after a major review during spring 2003. Also, NPD has re-evaluated the potential from possible future measures for improved recovery. This potential is expressed by the goal of reaching an average recovery of 50% for oil fields and 75% for gas fields. The new NPD estimate is a potential of 400 million Sm3 o.e.. This comprises 300 million Sm3 for oil, which is a reduction of 100 million Sm3 since last year, and 100 billion Sm3 for gas, a reduction of 400 billion Sm3 since last year. These new estimates are documented in the report "The petroleum resources on the Norwegian Continental Shelf 2003" issued by NPD in June 2003.

The estimate of the undiscovered resources at the year end is equal of that presented in the report. The estimate is 1160 million Sm3 oil, 340 million Sm3 condensate and 1900 billion Sm3 gas, a total of 3400 million Sm3 o.e. This is 26% of the total petroleum resources including what has been produced.

The remaining total recoverable resources are estimated to be 9.1 billion Sm3 o.e. with an uncertainty range from 6.9 to 12.0 billion Sm3 o.e.

In 2003 166 million Sm3 oil, 73 billion Sm3 gas, 11.4 million tons NGL and 12 million Sm3 condensate, totally 263 million Sm3 o.e. were sold and delivered. This is the largest total production from the Norwegian Continental Shelf since the production started in 1971.

11 new discoveries were made in 2003. The evaluation of three of these new discoveries was not finalized at year end. The expected volume of the new discoveries is in the range 22 - 80 million Sm3 oil, 36 ? 69 billion Sm3 gas and 7 ? 9 million Sm3 condensate. The evaluation of the size of the discoveries is ongoing. The volume discovered in 2003 is approximately 40 percent of the produced volume during the same year.

As of December 31, 2003, there were 64 fields on the Norwegian continental shelf with appoved Plan for development and operation (PDO) including 12 fields where production is ceased. 48 fields were on production (42 in the North Sea and 6 in the Norwegian Sea) and 4 field have not yet started production. Production started last year in the Fram and Grane fields in the North Sea and the Mikkel field in the Norwegian Sea.

At the year end the plan for development and operation (PDO) for 6305/5-1 Ormen Lange was being treated, and an application for PDO exemption for 34/10-47 S Gulltopp was likewise treated.

Reserves remaining in fields are 4074 million Sm3 o.e. consisting of 1235 million Sm3 oil, 2461 billion Sm3 gas, 124 million tons NGL and 142 million Sm3 condensate. The total volume of reserves has been increased by 297 million Sm3 o.e. compared to last years reporting. 501 million Sm3 o.e. are classified as contingent resources on existing fields. This is 4 % of the total resource base and a reduction of 3 million Sm3 o.e. since last year. This volume is comprised of 268 million Sm3 oil, 167 billion Sm3 gas, 29 million tons NGL and 10 million Sm3 condensate.

Contingent resources in discoveries not yet approved for development constitute 230 million Sm3 oil, 460 billion Sm3 gas, 22 million tons NGL, and 33 million Sm3 condensate, in total 764 million Sm3 o.e. or 6 percent of the total resource base. This is a reduction of 351 million Sm3 o.e. compared with last years estimate. The main reason for this reduction is that the big gas discovery 6305/5-1 Ormen Lange now is moved to category 3 as reserves. This move also accounts for most of the increase of reserves that is observed. 61 discoveries are not yet approved for development (resource categories 4F, 5F and 7F). 83 discoveries are reported under other fields or discoveries.

According to approved plans for production, the expected average oil recovery on the Norwegian continental shelf is 45 percent. The increase of the recovery factor for oil has slowed down the last years.

Contacts within the NPD:
Per Blystad , telephone: 51 87 61 88
Eric Mathiesen, telephone: 51 87 61 77