Norway awards 69 new oil exploration licences

Norway awards 69 new oil exploration licences

The Norwegian government has awarded 28 oil and gas companies a total of 69 offshore blocks to explore for petroleum in mature areas of its continental shelf, the Norwegian Petroleum Directorate said.

Shell, ConocoPhillips, Total, and Equinor won blocks, as did DNO, Aker BP, Lundin Petroleum, and Eni’s Vaar Energi.

Private-equity backed firms, such as Chrysoar, which acquired ConocoPhillips assets in the British North Sea last year, and Neptune Energy received stakes in eight and 13 blocks respectively.

Russia’s Lukoil, which holds stakes in two licences, and wholly-owned Rosneft subsidiary RN Nordic, a previous licence holder, were not awarded any blocks. A ministry spokesman declined to comment on why.

The annual predefined areas licensing round covers blocks adjacent to acreage previously explored or developed, as opposed to licensing rounds in the country’s frontier areas.

Thirty-three oil companies had submitted bids by a September deadline for a total of 90 offshore exploration blocks, including 48 in the Arctic Barents Sea.

The number of final awards depends on a range of factors, including Norway’s requirement that each licence must have several owners. Of this year’s 69 licences, 33 were in the North Sea off southern Norway, 23 were in the Norwegian Sea off central and northern Norway and 13 were in the far-north Barents Sea.

Norway’s oil and gas output is expected to rise sharply in the next several years as recent large discoveries come on stream, and authorities are keen to extend the lifespan of the oil and gas industry for decades to come.

“Hopefully, the exploration in the awarded acreage will result in new discoveries,” Energy Minister Sylvi Listhaug told an industry conference.

This is important to ensure employment, value-creation and future government revenue for Norway’s largest industry.

Separate from the awards, Norway also conducts so-called numbered licensing rounds, which include frontier parts of the Norwegian continental shelf, where exploration is more risky but where large finds could be made.

The Norwegian government aims to announce the next numbered licensing round before Norway’s 2021 general election, but must first agree an updated plan on areas to exempt due to environmental concerns, particularly in the Arctic.

In Ireland, the announcement late last year that the Government will not issue any new oil exploration licenses has been much criticised by the industry here.

Reuters

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