High Interest in Exploration for Oil and Gas on the Norwegian Continental Shelf – APA 2018

- The fact that the oil companies show such high interest in exploration on the Norwegian Continental Shelf is important for future value-creation, employment and state revenue from Norway's largest and most important industry. I am therefore very pleased that we also this year have received a large number of applications from a broad range of companies, says Norwegian Minister of Petroleum and Energy Kjell Børge Freiberg (The Progress Party).

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

The high interest in new production licenses continues into 2018. At the application deadline on September 4^th , the ministry had received applications from a total of 38 companies for new awards in the licensing round APA 2018. The 38 companies constitute a broad variety of companies, and range from the large international companies to the mid-sized companies and the smaller exploration companies. Both the number of applicant companies and the total number of applications are almost as high as in last year's record-breaking licensing round.

- Predictable and stable framework-conditions and an active licensing policy are two important main pillars in the Governments petroleum policy. The high interest in the licensing rounds over the last few years shows 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 NCS increases. The predefined area was significantly expanded in both the Norwegian Sea and the Barents Sea during the preparation for this year's licensing round. Interesting applications have been received both in the new expansions as well as in the previously announced APA-areas.

APA 2018 was announced on the 9^th of May 2018. The Ministry's objective is to award new production licenses in the announced areas at the beginning of 2019.

There is more information about the APA 2018 licensing round here, including maps over the announced areas.

Background:

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 sea-areas on the NCS.

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 14 000 bn. NOK in value creation, and has given the Norwegian state a net cash-flow of over  5 000 bn. NOK over the last 15 years. The states net cash-flow in 2017 from the petroleum sector was 168 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 (more on this here). 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 utilise 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:  

Aker BP ASA

A/S Norske Shell

Capricorn Norge AS

Chrysaor Norge AS

Concedo ASA

ConocoPhillips Skandinavia AS

DEA Norge AS

DNO Norge AS

Dyas Norge AS

Edison Norge AS

Eni Norge AS

Equinor Energy AS

Faroe Petroleum Norge AS

Idemitsu Petroleum Norge AS

Ineos E&P Norge AS

INPEX Norge AS

Lime Petroleum AS

Lundin Norway AS

M Vest Energy AS

MOL Norge AS

Neptune Energy Norge AS

OKEA AS

OMV (Norge) AS

Pandion Energy AS

Petrolia NOCO AS

PGNiG Upstream Norway AS

Point Resources AS

Repsol Norge AS

RN Nordic Oil AS

Skagen44 AS

Source Energy AS

Spirit Energy Norge AS

Suncor Energy Norge AS

Total E&P Norge AS

Tyr Exploration AS

VNG Norge AS

Wellesley Petroleum AS

Wintershall Norge AS