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The biggest interest in Norway’s latest licensing round has been in the Barents Sea, which is a very attractive exploration province.
Norway’s latest licensing round has sparked renewed interest in the country’s mature offshore sector, as not only does some of the newly-released acreage up for grabs lie in frontier waters within the Arctic Circle but they are also located adjacent to Russia’s own virginal exploration territory.
The country launched its 22nd licensing round earlier this year when the Norwegian Petroleum Directorate sought nominations from oil and gas companies looking to carry out exploration activity in previously untouched northern waters, both in the northern Norwegian Sea and the Barents Sea.
Encouraged by state-owned operator Statoil’s large Skrugard (Block 7220/8-1) and Havis discoveries (which together contain reserves estimated at between 400-600 MMboe) and its resultant plans for an aggressive exploration campaign in the surrounding vicinity, a record level of interest was registered by 37 companies with 228 blocks nominated for inclusion.
Almost all the interest was in Norway’s northernmost areas (181 nominations were for the Barents Sea alone), confirming that the upstream industry sees the Barents and the wider Norwegian offshore sector as an attractive prospective province in what is an increasingly competitive global exploration market.
To illustrate the trend, 43 companies nominated blocks in the country’s 21st round, with 46 companies doing likewise in the 20th round. These last three licensing rounds compare very favorably with the preceding ones, when only 19 companies nominated blocks in the 19th licensing round, a paltry 14 in the 18th round and 16 in the 17th round.
The government’s efforts to renew interest in its offshore sector by offering frontier acreage in the Barents Sea has clearly paid dividends, and this is reflected by Norway’s Energy Ministry deciding to offer a total of 86 blocks and part-blocks for bid, including 72 in the Barents sector.
“More exploration is now taking place throughout the southern Barents Sea, and there is renewed optimism and expectation of discoveries. This licensing round will contribute to maintaining the activity level in this area and to clarifying the resource potential in the Barents Sea,” said Sissel Eriksen, the Norwegian Petroleum Directorate’s exploration director, in the NPD’s official press release.
The deadline for bid submissions is Dec. 4, with awards to be made before mid-2013. The other 14 blocks and part-blocks are in the Norwegian Sea. But, it is the northernmost blocks in the Barents Sea that hold the most interest. Much of the reason for this is that the Arctic holds about 13% of the world’s undiscovered conventional oil and 30% of its undiscovered natural gas, according to the US Geological Survey.
This was a significant driver behind the politically vital Norwegian-Russian Delimitation Agreement that was sealed between the countries in 2010 and came into force last year, settling a decades-long border row between the two and singlehandedly removing a huge obstacle that had previously stopped all initiatives aimed at opening up the area.
Now that this has been consigned to history, Norway is also hoping to prepare the way to open the southern part of the formerly disputed area up for potential licensing in the 23rd licensing round.
Several of the blocks in the 22nd round already lie close to the maritime border between Norway and Russia, with one -- Block 7231 -- located directly on the border.
In an official statement, Norway’s Minister of Oil and Energy, Ola Borten Moe, said, “The Barents Sea is now a sea of opportunities. We have had very promising exploration results, and I now give the industry access to new areas connected with these discoveries.”
He continued, “The 22nd licensing round is a new, important step in the work to facilitate long-term activity in Norway’s most important industry. Together with improved recovery from existing fields, development of discoveries, and opening new areas, further exploration of open areas is one of the main elements in the government’s work to achieve such a development and thus create further growth and secure jobs across the nation.”
Russia has already positioned itself to be potentially involved in Norway’s latest licensing round, with Lukoil having already prequalified last year for operations in Norwegian waters, and Russia’s state-owned Rosneft lined up to co-operate with Statoil in certain blocks.
Blocks or part-blocks in the 22nd round include: 6706/2 and 3; 6707/1; 6705/7, 8, 9, and 10; 6704/12; 6604/8 and 9; 6605/1 and 9; 6606/7 and 8; 7423/12; 7424/10; 7425/10 and 11; 7317/4, 5, 6, 8, and 9; 7318/11 and 12; 7319/11 and 12; 7320/7, 8, 9, 10, 11, and 12; 7321/4, 7, 8, 9, 10, 11, and 12; 7322/6; 7323/3 and 4; 7217/9; 7218/1, 2, 4, 5, 6, 7, and 12; 7219/1, 2, 3, 4, 5, 6, 10, and 11; 7220/1, 2, and 3; 7221/1, 2 , 4, and 5; 7224/6; 7225/2 and 4; 7226/5 and 6; 7227/4 and 7; 7231/4, 5, and 6; 7127/5 and 6; 7128/4; 7130/4 and 7; 7017/6, 7, 8, and 9; and 7018/4.