The Shelf in 2005 - Activity level

12/01/2006 Investments made in 2005 are estimated at nearly NOK 83 billion (2005), excluding exploration costs.  This is NOK 16 billion more than the previous year. As regards 2006, investments excluding exploration costs are estimated at NOK 81 million.  In addition, we estimate that NOK 12 billion will be spent in connection with exploration.

We are currently experiencing a period of vigorous activity on the Norwegian shelf.  The high level of activity is the result of investments in major projects such as the Ormen Lange and Snøhvit developments.  In addition come investments in improved recovery projects on fields, plans for new projects on fields and a number of smaller discoveries which, in total, contribute to the high activity level.

Investments made in 2005 are estimated at nearly NOK 83 billion (2005), excluding exploration costs.  This is NOK 16 billion more than the previous year.

During the course of 2005, 16 Plans for Development and Operation (PDOs) and Plans for Installation and Operation (PIOs) were approved.  An application for exemption from the PDO requirement was also approved for Tune.

As regards 2006, investments excluding exploration costs are estimated at NOK 81 million.  In addition, we estimate that NOK 12 billion will be spent in connection with exploration.

The authorities expect to receive approximately 10 PDOs for development of discoveries in 2006.  In addition to these, amended PDOs are expected for several fields in operation.  Reopening of shut down fields may also be relevant.  In contrast to the projects approved in 2005, about one-half of the investments in new discoveries may be linked to new production facilities.

A higher activity level is forecast, with investments totalling about NOK 366 billion in the next five-year period.  This figure has been increased by NOK 62 billion in relation to the 2006 national budget.  Investments in fields, as well as in pipelines and land facilities under construction, will be cut in half from the current level of approx. NOK 40 billion in 2007.  This is largely due to the fact that the Langeled, Ormen Lange and Snøhvit projects are nearing completion.

There is great uncertainty associated with the future level of investments on the Norwegian continental shelf.  This applies particularly to phasing in of projects which the licences have not yet decided to develop.  The investment profile could also change as a result of shifts in timing and level for approved projects.

The investments during the period 2006 - 2010 are divided between 43 percent for production wells, 19 percent for modifications of existing facilities, 20 percent for construction of new facilities and 18 percent for investments in pipeline and land facilities.

The distribution of investments has undergone a marked change since the last halt in investments, which was in 1998.  In 1998, half of the investments were related to building new facilities, while today only 20 percent goes to new facilities.  Wells, modifications, pipelines and land facilities now have 60-70 percent higher investments than in 1998.

In 2005, operating costs excluding CO2 tax and tariffs amounted to about NOK 31 billion.  Total annual operating costs will be in the range of about NOK 36-37 billion for the period up to 2010.

Contact in the NPD:
Eldbjørg Vaage Melberg, tel. +47 51 87 61 00

Updated: 04/09/2009