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Calculating future oil and gas

19/10/2007 A key job for the NPD is to assess how much petroleum remains to be found on the Norwegian continental shelf. This estimate has been unchanged since 2003, despite discoveries made since then.

Text: Erling Kvadsheim

Resource estimates and knowledge of the various plays are important in determining the exploration choices made by the authorities – such as selecting acreage to put on offer.

The NPD currently calculates that some 10-36 billion barrels (1.6-5.8 billion standard cubic metres) of oil equivalent – crude, gas, condensate and natural gas liquids – remain to be found on the NCS.

Liquids account for roughly 45 per cent of this total, and gas for 55 per cent. Thirty per cent is expected to lie in the Barents Sea outside the area with overlapping claims, 35 per cent in the Norwegian Sea and the rest in the North Sea.

Considerable uncertainty attaches to these figures, with the Barents Sea – where the least information is available – as the least certain and the well-explored North Sea as the most assured.


Unchanged
Several factors explain why the NPD has not revised its estimate for total undiscovered resources since 2003, even though both oil and gas have subsequently been proven.

To start with, the NPD’s latest review confirmed a number of the assumptions which had underpinned the previous calculation.

Substantial data gathered from frequent awards in pre-defined areas (APA) and regular licensing rounds have also provided new information on the prospectivity of the NCS, and boosted assumptions about resources remaining to be found.

In addition, exploration results in the Barents Sea over the past few years have increased expectations about making oil rather than gas discoveries in these waters.

No new analysis of opportunities for finding petroleum off the north Norwegian Lofoten and Vesterålen islands has been carried out this time round. The Storting (parliament) has instructed the NPD to acquire geophysical data and map the area.

Estimates of undiscovered resources draw on the NPD’s expertise across the board. The basis is geological mapping of the NCS in areas both open to exploration and still closed.

Knowledge of reservoirs already proven is also very important, together with an understanding of how much of the discovered resources can be recovered.

Underpinning everything is the NPD’s extensive database, which contains details on wells, discoveries, fields, prospects and plays.

Analysis
The NPD calculates undiscovered resources with the aid of a technique called “play analysis”, which is very suitable for an area like the NCS with known geology, a number of identified prospects and many wells. Other methods are also available.

This analysis involves estimating how much petroleum can be proven and produced from each play, utilising statistical methods to give an overall figure for a wide area.

A number of geological and technical considerations must be taken into account for each play.

Estimates are also needed of how many prospects could be identified, how much petroleum they might contain and its split between gas and liquid, the recovery factor and the discovery probability.

This work draws on the NPD’s database as well as on detailed knowledge of geological conditions, technical solutions and financial aspects of the NCS.

These factors are calculated with a technique known as a Monte Carlo simulation, and the end result is an estimate of the oil and gas which remains to be found and how much might be recoverable.

Forecasts
The NPD also produces forecasts of future production from undiscovered resources. Play analysis makes it possible to work out how many discoveries must be made to reach the estimate and how big these need to be.

This is the least precise part of the assessment, and the results must be treated with caution. Assumptions used include estimates of future exploration activity, discovery rates, lead times from discovery to development and levels of production.

These factors rest in turn on historical experience from the NCS and the NPD’s expectations of future trends. The resulting forecasts are used in part to calculate future revenues and expenditure in the government’s national planning budget.

The NPD has defined 68 plays on the NCS, excluding the area with overlapping claims and the area around Jan Mayen, and 32 of these have been confirmed by proving hydrocarbons.

No less than 75 per cent of the plays in the North Sea, which has the longest exploration record, have been confirmed. That compares with nine of 20 in the Norwegian Sea and only six of 23 in the Barents Sea.

Seventy-three per cent of Norway’s estimated undiscovered resources are thought to lie in confirmed plays.


Read more about undiscovered resources and plays in

the 2007 resource report from the NPD.

Plays (pdf)


 

Updated: 04/09/2009