APA 2019 - Large Interest for the Norwegian Continental Shelf

Source National Energy Agency
Company Aker ASAChrysaor Holdings LimitedConcedo ASAConocoPhillipsDNO ASAEquinor ASAIdemitsuINEOSLime PetroleumLukoil PJSCLundin Energy ABM Vest Energy ASNeptune Energy GroupOKEA ASOMV GroupPandion Energy ASPetrolia NOCO ASPGNiG SARepsolSource Energy ASSpirit Energy LimitedSuncor Energy Inc.TotalVar Energi ASWellesley Petroleum ASWintershall Dea GmbH 
Tags Licensing Rounds, Upstream Activities
Date September 04, 2019

The Ministry of petroleum and Energy has received a great number of applications from 33 oil companies in the licensing round Awards in Predefined Areas (APA) 2019.

- This shows that there is a high interest from the companies, and that they want to contribute to long-term value creation on the Norwegian Continental Shelf. Identifying more resources through exploration is vital for Norwegian employment, future value-creation and our welfare state, says Norwegian Minister of Petroleum and Energy, Mr. Kjell Børge Freiberg.

Awards in Predefined Areas (APA) is an annual licensing round for the best know areas on the Norwegian Continental Shelf. It includes large parts of all available exploration acreage.

At the application deadline 27 August, the Ministry had received applications from a total of 33 companies. The applicants constitute a broad variety of companies, ranging from large international companies to mid-sized companies and small exploration companies. Both the number of applicant companies as well as  the total number of applications are high, and at a level comparable to the last few years' very large licensing rounds.

- Predictable and stable framework-conditions and an active licensing policy are two of the main pillars in the Governments petroleum policy. We have continued to expand the APA-area considerably based on professional advice. The high interest in the licensing rounds over the last few years shows that the NCS is competitive, and that the Government's petroleum policy has the desired effect, Minister Freiberg continues.

The APA-area is expanded as knowledge about the geology in areas on the NCSincreases. The predefined area was significantly expanded in both the Norwegian Sea and the Barents Sea during the preparation for this year's licensing round. The Ministry has  received interesting applicationsboth in the new expansions as well as in the previously announced APA-areas.

APA 2019 was announced  May 29, 2019. The Ministry's objective is to award new production licenses in the announced areas at the beginning of 2020.

The first licensing round on the NCS took place in 1965. The activity started in the North Sea, and exploration in the Norwegian Sea and the Barents Sea started around 15 years later. Thus, Norway will soon have more than 40 years of experience in all Norwegian sea-areas.

Approximately 170 000 people are today directly or indirectly engaged in the petroleum sector. The competence and the competitiveness in the industry also produces positive ripple effects into other industries. Since the first oil-discovery was made, the sector has contributed with over 14 600 bn. NOK in value creation, and has given the Norwegian state a net cash-flow of over  6200 bn. NOK this millennium. The states net cash-flow in 2018 from the petroleum sector was 251 bn. NOK. In 2018, the use of petroleum revenue in the National Budget equals more than 174 000 NOK for a family of four.

The award of new exploration acreage takes place in two equal licensing rounds. The numbered rounds takes place in the least known exploration areas, which for all practical purposes now means the deep-water areas in the Norwegian Sea and significant parts of the Barents Sea. Acreage in the best know exploration areas are awarded in the annual APA-rounds. As a consequence of the fact that exploration has been going on for decades, the majority of the North Sea, large parts of the Norwegian Sea and an ever-increasing area in the Barents Sea is today included in the APA-rounds.

The only difference in the process for the two rounds is in how the authorities stipulates the applicable area. In the numbered rounds, this happens after proposals (nominations) from the companies. This gives the authorities the best possible basis for announcing the areas that will give the most information about the regional geology and thus, effective exploration. This approach is not needed in the APA-rounds, where the key challenge is to identify resources in a timely manner in order to best utilize existing and planned infrastructure in the area.  

The petroleum activity on the NCS is conducted within the highest consideration for health, safety and the environment. Exploration, development and production takes place with low emissions to air. Greenhouse gas-emissions is a part of the EU Emissions Trading System (ETS). In addition, a high CO2 –tax is paid. This policy gives the companies financial incentives to reduce their own emissions.

The level of safety on the NCS is high, and normal exploration-activities, development and production has no proven negative effects on the natural environment.

Potential damage to the natural environment is limited to large accidental oil spills. The probability of an oil well blow-out is estimated to be one in every 7043 exploration wells drilled. On the NCS, approximately 50 wells are drilled each year. There has been very few larger oil spills on the NCS. There are requirements in place for emergency preparedness in order to reduce the consequences in the event of an accidental oil spill.  During 50 years of petroleum activities, no accidental oil spills have reached Norwegian shores, and no damage to the marine environment has been proven.

The companies that have applied are: 

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd