Norwegian oil & gas firm eyes more offshore acreage in North Sea

Norway-based oil and gas company Noreco, to be renamed BlueNord, has set the wheels into motion to participate in a mini-round of licencing in the Danish sector of the North Sea.

Noreco revealed on Wednesday, 12 April 2023, that it had submitted a licence application for acreage containing the Elly-Luke gas discovery in the Danish part of the North Sea. As a result, the firm will participate in the Danish Ministry of Climate, Energy and Utilities’ upcoming mini-round of licencing.

According to the Norwegian player, the licence application aligns with its approach of considering opportunities to maximize shareholder value as part of its capital allocation process. If the company is successful in its application, it expects to carry out a preliminary technical review of Elly-Luke prior to any longer-term commitment.

Noreco says that this asset is believed to have the potential to provide approximately 5 billion cubic meters of natural gas to Denmark and Europe while producing “safely, efficiently, and with low emissions.” Furthermore, the Norwegian firm highlights that this contribution to energy security would help lower energy prices for consumers, while also recognising that energy produced within the EU is “a reliable alternative” to imported energy sources like LNG and coal that have “significantly higher” climate footprints.

Based on Noreco’s statement, the license application is its “first tangible step” taken outside of its ownership in the Danish Underground Consortium (the DUC) and will together with other planned initiatives ensure that the company can maintain “a long-term robust dividend policy,” once the Tyra redevelopment is completed by the end of 2023 and create value for all stakeholders.

In addition, the Norwegian firm entered into a strategic partnership with Semco Maritime, which will allow the two companies to jointly identify, explore and investigate opportunities in the oil and gas space. Noreco sees this as “a tangible and important step” in the ongoing trajectory towards long-term maximisation of the value from the existing assets and evaluating any new opportunities.

Euan Shirlaw, Chief Executive Officer of Noreco (to be renamed BlueNord), remarked: “The resources in the Danish North Sea have benefitted the country, both economically and strategically, for more than 50 years and will continue to do so until 2050. Our license application to assess the potential for developing the Elly-Luke discovery looks to build upon this with our own expertise to provide the energy that Denmark and Europe needs for as long as it is needed.  

“This will be delivered in a manner that is consistent with our objective of maximising distributions to shareholders, however, Elly-Luke provides additional attractive optionality for value creation.  If successful in the application process, BlueNord expects the license to be awarded in late 2023, with an initial study period of limited financial commitment through 2024.”