The shelf in 2004 - Activity level
14/01/2005 There is a high activity level on the Norwegian continental shelf. This level is mainly associated with investements in major field developments such as Ormen Lange and Snøhvit. Contributing to the level of activity are also invesments in improved recovery projects, plans for development and operations and a number of small discoveries.
Investments for 2004 have been estimated at nearly NOK 70 billion (2004), excluding exploration costs. This is ten billion more than the previous year.
During 2004 the authorities received eight applications regarding Plan for Development and Operation (PDO) and PDO exemptions. Alvheim and Urd were approved in 2004, while Vilje and Rimfaks/Skinfaks IOR are expected to be approved during the first quarter of 2005. Far more applications are expected this year, with 16 PDOs and PDO exemptions, one PIO (Plan for Installation and Operation), as well as three applications for a change in the PDO.
There is great uncertainty regarding the future investment level on the Norwegian continental shelf, particularly as regards the timing of projects that have yet to be approved. The investment profile may also change due to postponements and the level of approved projects.
Investments for the period 2005 - 2009 are distributed with 39 per cent on production wells, 20 per cent on modifications of existing installations, 21 per cent on development of new installations, and 20 per cent on investments in pipeline and land facilities.
The distribution of investments have changed markedly since the last investment peak, which took place in 1998. At that time investments were as high as they are expected to be this year. In 1998 half of the new investments related to construction of new facilities, while at present only 17 per cent is used for new facilities. Wells, modifications, pipelines and land facilities are now receiving 60 -70 per cent higher investments than in 1998.
Operating expenses excluding CO2 tax and tariffs amounted to around NOK 33 billion in 2004. This level is expected to remain steady for the next few years.
Contact in the NPD:
Eldbjørg Vaage Melberg, tel +47 51876100