Page 4 - Euroil Week 39 2019

EurOil COMMENTARY EurOil
Potential still there off Norway: NPD
Subsea tie-backs to existing infrastructure will be key to developing Norway’s remaining oil and gas discoveries
NORWAY
WHAT:
The NPD estimates the Norwegian shelf could yield decades more profitable oil and gas.
WHY:
Remaining discoveries are smaller and will need connection to existing platforms and pipelines to be developed.
WHAT NEXT:
Production is seen peaking in 2023.
NORWAY’S largely mature continental shelf still has the potential to produce profitable oil and gas for decades to come, according to a report by the Norwegian Petroleum Directorate (NPD).
The country’s offshore zone harboured 8.3bn cubic metres of remaining recoverable oil and gas at the end of last year, the NPD said, with around half this amount proven in fields and discoveries. The directorate estimated there were as many as 85 discoveries off Nor- way that operators were yet to file develop- ment plans for, with a total investment value of NOK400bn ($44bn).
These finds held around 15% of remaining discovered resources, or 660mn cubic metres of oil equivalent, including 360 mcm of oil and condensate and 300 bcm of gas. The North Sea accounts for around half the resources of these discoveries,whiletheNorwegianSeaholdsjust under a third and the relatively frontier Barents Sea about a fifth.
Less encouraging, while the number of unde- veloped discoveries off the Norwegian coast is around the same as two decades ago, their aver- age size is much smaller, the NPD said. Many have recoverable reserves of less than 63mn boe, making subsea tie-backs key for their develop- ment. The good news is that they have become more profitable to exploit in the last 20 years because of technological advances and more cost-effective solutions.
“Maintaining existing infrastructure are uti- lising its spare capacity are important precon- ditions for realising the assets in the discovery portfolio,” the NPD said. “It is also important that new facilities are built with enough flexibility to
accept additional resources.”
The directorate called on exploration of areas
surrounding existing fields to continue, so new finds could be brought on stream to fill spare infrastructure capacity.
Meanwhile, reserves in existing fields have increased by nearly 9bn boe between 2000 and 2018, the NPD said, equivalent to three Johan Sverdrup fields. This is largely thanks to innovations in recovery. Cost control and efficiency gains have also led to a 40% cut in average production drilling costs, while oper- ating expenditure at most fields has fallen by 30% since 2013.
“New solutions, including automation and remote operation, improved use of data and more efficient operation, could further reduce costs and help to increase production even more,”theNPDsaid.
There were 85 fields in production at the end of August, it said, forecasting that oil and gas output would climb up to a peak in 2023. The growth will come on the back of new field start- ups, including Johan Sverdrup, due for launch later this month. These new projects will more than offset flagging production levels at mature deposits.
“There is enough oil and gas on the Nor- wegian shelf to ensure profitable, efficient and responsible petroleum activity for many dec- ades,” the NPD’s head of development and opera- tions, Ingrid Solvberg, commented. “Production will increase going forward to 2023. Despite this, both emissions to air and discharges to sea are holding steady. That means that emissions per produced unit are declining.” ™
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Week 39 03•October•2019