Activity on the Norwegian continental shelf (NCS) is predicted to be high and keep rising over the next few years but not without industry and government commitment, according to Norway’s oil industry association.
The Norwegian Oil Industry Association (OLF)’s business trend report for 2011 – optimism in the Norwegian petroleum industry – paints a buoyant outlook for the country’s oil sector.
It said that, for the first time since Ormen Lange was discovered in 1997, resources found on the NCS so far in 2011 already outstrip anticipated production for the year.
The largest and most important has been Avaldsnes/Aldous Major in the North Sea, which ranks as this year’s biggest offshore find worldwide and could also be Norway’s third largest ever.
In addition, substantial discoveries have been made in the Barents Sea with the Skrugard prospect and the Norvarg gas field.
However, OLF chief executive Gro Brækken warned that for production to remain high on the NCS there needed to be commitment from government and industry.
“Despite world economic uncertainties, the level of activity on the Norwegian continental shelf will be high and rising over the next few years,” she said.
“New fields are going to be developed, and existing installations will be maintained and upgraded.
“A high level of exploration activity has prevailed on the NCS in recent years. 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.”
However, Ms Brækken said: “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 (in the Norwegian Sea) off Lofoten, Vesterålen and Senja.”
According to the report, investment measured in fixed 2011 prices is estimated to grow from about £16billion this year to a peak of £20billion in 2014, and could then decline somewhat in 2015 and 2016.
Uncertainty in the estimates relates primarily to uncertain predictions for world economic trends and thereby for future energy prices, said the OLF.
Towards the end of the forecast period, uncertainty also reflected doubts about when capital spending will be phased in for this year’s discoveries, particularly Avaldsnes/Aldous Major, it said.
“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 Ms Brækken.
“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.”