NORWAY’S oil industry association Oljeindustriens Landsforening (OLF) is pushing for areas of the Norwegian Continental Shelf so far barred to oil and gas exploration and development to be opened up.
While OLF says the level of activity on the NCS will stay high and even increase over the next few years, nonetheless, it claims that the industry needs access to the anticipated resources in the Norwegian Sea off Lofoten, Vesteralen, and Senja.
This will please neither environmental groups nor the fishing industry which is especially concerned about rigs being access to the cod-rich waters off Lofoten, which remains home to an important, traditional fishery.
In a presentation in November, OLF’s CEO Gro Braekken spoke bullishly about the current state of play on the NCS including the development of new resources despite global economic uncertainties.
“A high level of exploration activity has prevailed on the NCS in recent years,” Braekken said. “Forty-eight exploration wells had been completed at October 31, with six still being drilled. The new discoveries are gratifying because they show that substantial resources still remain in mature areas like the North Sea, while faith in the Barents Sea as a petroleum province has been strengthened.”
But she warned: “If we’re going to maintain production on the NCS, we need improved recovery, more exploration, and the opening of new areas.
This year’s discoveries in the North and Barents Seas are all important, and encourage new commitment. However, they aren’t big enough to prevent production from declining after 2020. On its way north, the industry accordingly needs access to the anticipated resources off Lofoten, Vesteralen and Senja.”
OLF’s CEO said too that investment this year alone was estimated to be $26.8billion and that spending would peak at $32.4billion in 2014, and could then turn the corner into decline around 2015/16, subject to clarification as to when this year’s discoveries, especially the giant Aldous-Avaldsnes discovery might be developed. The current estimate is that in-place reserves may be up to 3.4billion barrels of oil, though it has been speculated that actual reserves could be as high as 7billion barrels.
“High oil prices over a long period have encouraged a greater willingness to invest, with both new field developments and upgrades on producing fields planned on a large scale,” said Braekken. Major upgrades to the old giants on the NCS are being implemented at the same time as new smaller discoveries get developed at a rapid pace.”
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