Invitation 2022-1
Invitation to apply for licences pursuant to the CO2 Storage Regulations for injection and storage of CO2 on the Norwegian Continental Shelf
The Royal Ministry of Petroleum and Energy (the Ministry) is hereby announcing an invitation to apply for licence (licence) pursuant to Regulation No. 1517 of 5 December 2014 relating to exploitation of subsea reservoirs on the continental shelf for storage of CO2 and relating to transportation of CO2 on the continental shelf (the CO2 Storage Regulations).
The CO2 Storage Regulations are aimed at exploitation of subsea reservoirs on the continental shelf to store and transport CO2 on the continental shelf. Companies that aim to carry out activities as mentioned require a licence pursuant to the CO2 Storage Regulations. In addition, on 25 February 2020, the Petroleum Safety Authority stipulated the Regulations relating to safety and working environment for transport and injection of CO2 on the continental shelf (the CO2 Safety Regulations). In order to be awarded a licence, the applicant must have the financial strength, technical and geological expertise and reliability that is considered to be required to carry out activity pursuant to the CO2 Storage Regulations.
This announcement covers one area in the North Sea; see enclosed maps and coordinates. The purpose of this announcement is to invite qualified companies to submit applications to be awarded a licence pursuant to the CO2 Storage Regulations. Companies that have the necessary competency and that have matured industrially sound and profitable projects will be able to apply for a licence adjusted to the company’s need.
Licences under the CO2 Storage Regulations will be awarded pursuant to a so-called open-door policy. This means that the individual applicant(s) seeking a licence pursuant to the CO2 Storage Regulations can apply whenever they believe there is sufficient basis, i.e. a need, to apply for a licence.
The Ministry of Petroleum and Energy (MPE) will continuously assess received applications, which includes an HSE assessment from the Ministry of Labour and Social Inclusion (MLSI). This assessment will review the applicant's expertise and need for a storage licence, and will determine whether it is likely that the award criteria will be satisfied. If an application is of sufficient quality and adequately demonstrates the actual need for a storage licence, the acreage the State deems to be relevant will be announced with an application deadline.
Such an announcement is a mechanism to ensure that the CO2 Storage Regulations' requirement for the award to take place according to "objective, published and non-discriminatory criteria" is satisfied, and will give other relevant companies the opportunity to apply for the announced acreage.
Within the relevant area, the application should cover the reservoirs the applicant wants to map or has mapped as suitable for storing CO2 and list the coordinates for the acreage the applicant believes the licence should comprise. The applicant(s) must document that the award of a new licence is a necessary prerequisite for implementation and/or further development of concrete, socio-economic profitable project(s) for capture, transport and storage of CO2.
The licence's specific geographical scope, duration, any work commitments and other specific conditions will be stipulated by the Ministry at the time of the award.
If a licence pursuant to the CO2 Storage Regulations is awarded to multiple legal persons together, all participants must fulfil the conditions for the award. In such instances, requirements may be set regarding company structure and division of responsibility between the participants, and that a partnership agreement be entered into for the activities pursuant to the licence, cf. Sections 3-1 and 4-1 (6) of the CO2 Storage Regulations.
If a licence is awarded, requirements will be set regarding the completion of a work commitment within a deadline stipulated by the Ministry. If the work commitment is not completed within this deadline, the licence will lapse unless the Ministry consents to extending the deadline.
The various industries that want to contribute to socio-economically profitable activity are welcome in Norwegian ocean areas. It is not a question of either/or, but rather the more the merrier, and this sets high standards for good coexistence between all types of commercial activity at sea. The Norwegian authorities expect both new and existing industries to take other commercial activity into consideration to ensure that the good coexistence at sea can continue. This must be part of the basis for selecting the storage location.
Special environmental and fishery conditions may be set for the licence.
The Ministry reserves the right to negotiate with the applicant(s) on the following:
a) Licence acreage.
b) Duration of the licence.
c) Work commitment with associated schedule, including deadline for submitting a plan for development and operation (PDO).
d) Conditions for post-operation and transferring responsibility to the State, represented by the Ministry of Petroleum and Energy.
The Ministry may award licences to multiple applicants together and appoint an operator.
The following criteria will be used as a basis in awarding a licence pursuant to the CO2 Storage Regulations, the potential composition of licensee groups, and appointing operators:
a) The applicant(s)'s understanding of the geology in the geographical area in question and how the licensee plans to undertake additional efficient mapping of the area and the plan for storing CO2 in the reservoirs in question.
b) The applicant(s)'s relevant technical expertise, as well as how this can actively contribute to cost-effective activities under the licence.
c) That the applicant(s) have satisfactory systems for quality assurance and HSE.
d) That the applicant(s) have satisfactory financial capacity to carry out all activities under the licence.
e) The applicant(s)'s offered work commitment and conditions for post-operation and transferring responsibility to the State, represented by the Ministry of Petroleum and Energy.
f) The applicant(s)'s experience with CO2 storage on the Norwegian Continental Shelf or equivalent relevant experience from other areas, including experience with planning and developing storage locations for CO2, oil and gas fields, or geological gas storage reservoirs.
g) The licence will generally be awarded to a joint venture where at least one licensee, as part of petroleum activities or CO2 storage, has drilled at least one well on the Norwegian Continental Shelf as an operator or has equivalent relevant operational experience outside the Norwegian Continental Shelf.
h) Applicants that are appointed as operators of licences pursuant to the CO2 Storage Regulations in the Barents Sea must, as part of petroleum activities or CO2 storage, have drilled at least one well on the Norwegian continental shelf as an operator or have equivalent relevant operational experience outside the Norwegian Continental Shelf.
In line with the CO2 Storage Regulations, an applicant will normally be expected to be awarded an exploration licence prior to being awarded an exploitation license in a relevant area. Exploration licences can be awarded to one or more competent companies. If a licence is awarded to multiple companies, the Ministry of Petroleum and Energy will generally appoint one of the companies as operator.
Exploration licences will normally be awarded with a work program with a binding phase and subsequent conditional phases with decision points for continuation or relinquishment. The work program will normally be concluded with a requirement to submit a plan for development and operation (PDO) for the storage location or relinquishment.
The size on acreage awarded, the duration of the exploration licence and the commitments that accompany such an award will be the result of a concrete assessment of the application(s), the authorities' own assessments and other potentially relevant aspects. The purpose of awarding storage licences is to facilitate the development of a new maritime industry on the Norwegian shelf. In order to achieve this goal, the Norwegian authorities will design work programs that ensure rapid and efficient progress in awarded acreage. The work programs will aim to ensure that sufficient work is carried out under the licence to mature the awarded acreage into a secure storage location.
Licensees with exploration licences can apply for an exploitation license alongside submitting the plan for development. Licensees that have completed their work program and submit a satisfactory PDO along with a sufficiently good application for an exploitation license can expect to be awarded an exploitation license. The holders of exploration licences must be confident that they will be able to complete started projects on which they have expended considerable resources, and the authorities must be confident that the awarded acreages will be managed pursuant to the objective and that approved projects will actually be carried out. The authorities will assess the scope of the licence, both in acreage and stratigraphy in connection with awarding the exploitation licence.
Reporting of financial and company-related aspects must conform with the Guidelines for application letters and company information (pdf)
Information of any nature which is communicated to the authorities in connection with the application will remain confidential until the licence is awarded, cf. Section 11-20 of the CO2 Storage Regulations. At this point, the information will remain confidential to the extent this follows from the Public Administration Act for a period of 20 years, cf. Section 13c (3) of the Public Administration Act.
Each application will be subject to an application fee prior to submission of NOK 109,000.
If multiple companies join forces to apply for a licence, this will be considered a single application. In such instances, one of the companies will be responsible for paying the application fee.
The fee must be paid to the State, represented by the Norwegian Petroleum Directorate, account number 7694.05.00326. The payment must be labelled "Licence pursuant to the CO2 Storage Regulations". A copy of the receipt for the paid fee must be enclosed with the application.
The King in Council may determine that one or more licences shall be awarded within the announced acreages but is not obliged to award licences on the basis of received applications.
Applications for licences must be submitted to the Ministry in electronic format, with copies to the Ministry of Labour and Social Affairs, the Norwegian Petroleum Directorate and the Petroleum Safety Authority in the same format.
The application must be labelled as follows:
"Application for licence pursuant to the CO2 Storage Regulations";
and be submitted to;
The Royal Ministry of Petroleum and Energy
c/o Section for Exploration
PO Box 8148 Dep
0033 Oslo, Norway
via L2S or Altinn
Copies must also be submitted via L2S or Altinn to:
The Ministry of Labour and Social Affairs
The Norwegian Petroleum Directorate
The Petroleum Safety Authority
The applications must be received by 1 June 2022 at 12:00.
All applications received by the mentioned deadline will be considered to have been received at the same time.
Updated: 02/11/2022