The shelf in 2003

From the Norwegian Petroleum Directorate's (NPD's) point of view, petroleum activities in Norway in 2003 showed a more positive trend than was expected at the beginning of the year.

The preliminary accounts for 2003 show a shelf characterized by heavy investments, several new discoveries, an increase in total reserves and record-breaking production.

11 new discoveries
Last year, 22 exploration wells were spudded, which is seven more than the companies had reported to the NPD at the beginning of the year.  Eleven new discoveries were made on the Norwegian continental shelf, seven in the North Sea and four in the Norwegian Sea.  A preliminary evaluation of the discoveries shows that in 2003, about 50 percent of our production was replaced by new discoveries.
In 2004 , exploration activity is expected to be around 20-25 exploration wells, or approximately the same level as in 2003.  These figures include a drilling campaign in the Barents Sea.

30 new production licenses
A total of 30 new production licenses were awarded on the Norwegian continental shelf in 2003; 11 in the North Sea award 2002 (NST 2002) and 19 in predefined areas in the North Sea and the Norwegian Sea (TFO 2003). In December, the authorities announced the 18th licensing round with awards scheduled for the second quarter of 2004.  In terms of acreage, this is the largest conventional announcement on the Norwegian continental shelf since the 1st licensing round in 1965.  2003 is thus a record-breaking year as regards the acreage made available.

Increased production
Petroleum production on the Norwegian shelf reached new heights in 2003.  A total of 262 million Sm3 oil equivalents were produced - this is 3 million more than in the previous peak year 2002.  In 2004, petroleum production is expected to remain at about the same level as in 2003.  Production in the next five-year period is expected to be higher than production in the five-year period 1999 ? 2003.  This increase is the result of higher gas sales.

Three new fields have started producing in 2003; Fram, Grane and Mikkel. In 2004, another two fields will start production; Kvitebjørn and Skirne.

Higher investment level
Investments in 2003 amounted to about NOK 62 billion - excluding exploration costs.  This is NOK 10 billion more than in 2002.  An increase in investments is expected in the period 2004 ? 2008 as compared with the previous five-year period.  Estimated investments for the period are nearly NOK 300 billion.

Increase in total resources
The preliminary resource accounts as of 31 December 2003 show an increase in the total resources on the Norwegian continental shelf from 12.8 to 12.9 billion Sm3 o.e. The increase is attributed both to the growth of reserves in existing discoveries, as well as new discoveries.

New players on the shelf
In Storting White Paper No. 38, 2001 ? 2002 on the oil and gas activities, the authorities advocate bringing new players on to the Norwegian shelf.  However, demands are made of new operators and licensees, both as regards financial strength, capacity and competence to safeguard the applicable requirements relating to resource management and health, safety and the environment, through a prequalification scheme.  Nine companies were prequalified in 2003, three as licensees and six as operators.  Six of these companies were awarded blocks in TFO 2003 ? predefined areas.

Progressive environmental work
One of the most controversial oil policy issues in 2003 was linked to potential petroleum activities in Lofoten and the Barents Sea.  In connection with the Ministry of Petroleum and Energy's ULB report, the NPD was responsible for sub-report No. 10 on environmental technology.  In this report, the NPD concluded that the precondition for zero discharges to sea can be met with the aid of existing technology and technology currently under development.
The Norwegian Petroleum Directorate has been involved in a number of environmental projects during 2003.

Optimistic Director General
"Based on data submitted by the companies, the NPD believes that there is reason to take an optimistic view of the prospects in 2004," says Director General Gunnar Berge.

Contact in the NPD:
Eldbjørg Vaage, tel. 51876100