Norway Expands Acreage In Latest Oil Licensing Round

Norway announced on Wednesday the latest oil licensing round in mature areas on the Norwegian Continental Shelf, expanding this year’s predefined area by 103 blocks in the Norwegian Sea and the Barents Sea.

Companies have until September 4, 2018, to bid, and the government aims to award the new production licenses in early 2019, the Norwegian Ministry of Petroleum said in a statement.

“Awarding acreage in mature areas in annual APA-rounds is an important part of the Norwegian Government’s commitment to a stable and long-term petroleum policy,” Norway’s Minister of Petroleum and Energy, Terje Søviknes, said.

“Access to prospective exploration acreage is crucial in order to make new petroleum discoveries. New discoveries on the Norwegian continental shelf ensure value creation, employment and Government revenues,” Søviknes noted.

Norway will be able to sustain its oil and gas production until 2023, thanks to the giant Johan Sverdrup oil field in the North Sea that is slated for start-up in 2019. However, without major new oil discoveries, authorities fear that the industry is set for a lasting decline after 2023.

“If petroleum production is to be maintained at the current level beyond 2025, it is absolutely essential that additional profitable resources are proven, also larger discoveries,” the Norwegian Petroleum Directorate (NPD) said at the beginning of this year.

Related: Qatar Petroleum To Boost Production Despite Blockade

Last year, companies focused on the frontier areas rather than on the mature areas, but the exploration campaign was a flop. This year, the plans that companies have submitted for drilling indicate that most exploration wells will be drilled in the North Sea, the NPD said, in what could be some relief for authorities that oil firms will not snub again exploration in the area that has made Norway a leading oil and gas producer.

In the previous 2017 licensing round in mature areas, a record high number of companies—39—applied for new acreage since the awards in predefined areas (APA) scheme was launched in 2003. In January, Norway awarded a record number of licenses in that round, issuing 75 production licenses and ownership interests to 34 companies, including Statoil, Shell, Aker BP, ConocoPhillips, and Total, among others.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• The Real Reason Trump Killed The Iran Deal
• Goldman: Oil Prices To Hit $82.50 By The Summer
• Saudi Arabia Ready To Start Pumping More Oil