The Shelf in 2015

14/01/2016 Low oil prices have given rise to considerable challenges for the petroleum industry. Significant remaining resources, combined with cost reductions and improved efficiency, can ensure continued high activity and future profitability.

We have had some positive news in 2015, despite the negative trends. Several new wells and good regularity on the fields have delivered an increase in oil production for the second consecutive year, and it will remain high in the years to come. A new gas sales record was also set as a result of higher demand from Europe.

There was a substantial drop in revenues, but the industry continues to make a strong contribution toward maintaining Norway's general welfare level.

"Even in a demanding year, it's good to see that the oil and gas industry is still the country's largest, with total export values reaching well over NOK 400 billion," says Director General Bente Nyland.

"It is also gratifying to see that the industry has invested substantial effort in increasing efficiency. This work is starting to materialise in the form of lower costs."

Eighty-two fields were in operation at the end of 2015, compared with 51 ten years ago. This illustrates the enormous development activity that has taken place in recent years. Never before have more wells been drilled than in 2015, when exploration wells are included. Fifty-six exploration wells were spudded; 11 discoveries were made in the North Sea, and six in the Norwegian Sea. However, most of these discoveries were minor.

From a record level in 2013 and 2014, investments fell by about 16 per cent from 2014, to just under NOK 150 billion. They are expected to continue their decline going forward, followed by a moderate increase from 2019. The NPD estimates that total costs will be well in excess of NOK 200 billion per year in the next few years.

The authorities approved four plans for development and operation (PDOs), compared with just one in 2014. These four have led to an increase in the reserves estimate on the Norwegian Shelf – despite the fact that around 230 million Sm3 oil equivalents of the reserves were produced.

Four new fields came on stream in 2015. Six fields are currently being developed in the North Sea, two in the Norwegian Sea and one in the Barents Sea. The NPD expects to receive development plans for three new fields this year.

"Activity will remain high in the years to come, in spite of the decline since 2014. Therefore, it is important that the companies make wise decisions and keep a long-term perspective," says Bente Nyland.

More than half of the resources on the Shelf have yet to be produced. The Director General is concerned that sinking oil prices will mean that measures will not be implemented, and resources will be left in the ground.

"We see a tendency for the companies to prioritise short-term earnings rather than long-term value creation," says Nyland.

The Norwegian Petroleum Directorate expects the industry to make decisions that will secure these assets in the years to come, and that it accelerates efforts to implement measures that can reduce costs and boost efficiency, for example through the use of new technology.

"Reduced costs mean greater profitability. This can help pave the way and make it easier to develop more discoveries," concludes the Director General.

Updated: 14/01/2016

Latest news

Boreløyve for brønn 6407/9-13 i utvinningsløyve 1060
22/10/2021 The Norwegian Petroleum Directorate has issued a drilling permit to Equinor Energy AS for well 6407/9-13, cf. Section 13 of the Resource Management Regulations.
Dry well southeast of the Johan Sverdrup field in the North Sea – 17/8-1
22/10/2021 Lundin Energy Norway AS, operator of production licence 976, is in the process of concluding the drilling of wildcat well 17/8-1.
Drilling permit for well 36/1-4 S in production licence 885
21/10/2021 The Norwegian Petroleum Directorate has issued a drilling permit to Wellesley Petroleum AS for well 36/1-4 S, cf. Section 13 of the Resource Management Regulations.
Production figures September 2021
20/10/2021 Preliminary production figures for September 2021 show an average daily production of 2 022 000 barrels of oil, NGL and condensate,
Drilling permit for well 24/12-7 in production licence 1041
18/10/2021 The Norwegian Petroleum Directorate has issued a drilling permit to Aker BP ASA for well 24/12-7, cf. Section 13 of the Resource Management Regulations.
Minor oil and gas discovery near the 7122/6-1 (Tornerose) discovery in the Barents Sea – 7122/6-3 S
13/10/2021 Vår Energi AS, operator of production licence 901, has concluded the drilling of wildcat well 7122/6-3 S.
Dry well near the Solveig field in the North Sea – 16/4-12
08/10/2021 Lundin Energy Norway AS, operator of production licence 981, is in the process of concluding the drilling of wildcat well 16/4-12.
25 years’ experience with safe and secure CO2storage
05/10/2021 Carbon capture and storage (CCS) is a hot topic. Director General Ingrid Sølvberg recently took part in a panel discussion at the EU-Norway Energy Conference to spread the word about safe and secure storage of CO2 on the Norwegian shelf.
Minor oil discovery near the Ekofisk field in the North Sea – 2/5-15
28/09/2021 DNO Norge AS, operator of production licence 006 C, has concluded the drilling of wildcat well 2/5-15.
Delineation of the 6507/3-13 oil and gas discovery southwest of the Norne field in the Norwegian Sea – 6507/3-14
28/09/2021 Equinor Energy AS, operator of production licence 159 B, has concluded the drilling of appraisal well 6507/3-14.