Norway presents 24 players with 62 oil & gas licenses amid ‘great interest’

As part of the award in the pre-defined areas 2023 (APA 2023) round, encompassing the predefined areas offshore Norway, the country’s Ministry of Petroleum and Energy has offered 62 production licenses to 24 oil and gas companies for further exploration activity on the Norwegian Continental Shelf (NCS). This represents an increase compared with the previous three years.

While revealing the significant interest in further hydrocarbon exploration on the NCS, the Ministry of Petroleum and Energy disclosed in August 2023 that applications from 25 companies were received by the application deadline of August 23, 2023, in connection with APA 2023, which was launched in May 2023. As explained at the time, the aim was to award new production licenses in the North Sea, Norwegian Sea, and the Barents Sea at the beginning of 2024.

In an update on Tuesday, January 16, 2024, the Norwegian Offshore Directorate (NOD) confirmed that 24 companies were offered ownership interests in a total of 62 production licenses, with 29 being in the North Sea, 25 in the Norwegian Sea, and 8 in the Barents Sea. In addition, 16 of these production licenses are additional acreage for existing production licenses.

Kalmar Ildstad, Director Licence Management at the NOD, commented: “We can see that the companies still have plenty of faith in making more discoveries in areas with familiar geology and close to existing infrastructure. It’s important to prove resources so that available capacity in established process plants and pipeline systems can be utilized. This means that even small discoveries can yield significant value creation.”

The annual APA licensing rounds were introduced in 2003 to facilitate the discovery and extraction of profitable resources in mature areas before existing infrastructure is shut down. These APA rounds occur annually and within a predefined area, providing predictability to the companies about the areas available for application in the APA round, and facilitating regular replenishment of new exploration areas to the companies.

According to the Norwegian Ministry of Energy, APA rounds are important for achieving effective exploration. Last year, 47 licenses were awarded. The APA area is expanded over time, based on professional assessments of the areas’ maturity, and especially the need for gradual exploration and utilization of time-critical resources. Currently, the APA area covers most of the opened, available exploration areas on the Norwegian Continental Shelf.

Terje Aasland, Norway’s Minister of Energy, outlined:  “Awarding new licenses through the awards in predefined areas is a pillar in the continued development of the Norwegian shelf. To see such great interest in further exploration activity is very encouraging. This is important for both employment and value creation, as well as for facilitating Norway’s role as a stable energy supplier to Europe.

“Last year, I specifically encouraged companies to explore opportunities in the Barents Sea. This year we are offering more than double the number of production licenses in this region compared to last year’s round. This shows that several companies have responded positively to the call, and that they are conscious of their social responsibilities. Proving more gas resources is important for profitability, by increasing the export capacity from this region.”

The list of companies that have been offered parts in licenses and/or operatorships includes Norske Shell (1/1), Aker BP (27/17), Concedo (2/0), ConocoPhillips Skandinavia (3/2), DNO Norge (14/3), Equinor Energy (39/14), Harbour Energy Norge (1/1), INPEX Idemitsu Norge (5/1), andKUFPEC Norway (2/0).

In a separate statement, Equinor confirmed the award of 39 new production licenses – 18 production licenses in the North Sea, 13 in the Norwegian Sea, and 8 in the Barents Sea with the Norwegian firm being picked as the operator of 14 of the awarded licenses, and a partner in 25 – in APA 2023.

Jez Averty, Equinor’s Senior Vice President for Subsurface on the NCS, commented: “We are pleased with the award. These licenses give Equinor and our partners new opportunities to further develop the Norwegian Continental Shelf as an energy province. We are familiar with the geology and confident that we will make new discoveries.

“Continued active exploration is necessary in order to reduce the production decline that will occur on the NCS. Phasing in oil and gas from new discoveries will secure long-term activity and contribute to energy security in the European and UK energy transition.”

Equinor is the operator of 35 offshore platforms in Norway. The Norwegian giant explains that the authorities increased this year’s round of awards by 92 blocks in the northwest of the Norwegian Sea and west of the Barents Sea.

Averty added: “We are modernizing the infrastructure on the NCS with an eye to the energy transition. Based on our plans for electrification and continued cuts in our own greenhouse gas emissions, the production from new discoveries in brownfield areas will not increase our production and transportation emissions.

“ For discoveries that will require new development solutions, we will aim at technological solutions with low emissions. Equinor’s energy transition plan, committed to cutting emissions in line with the Paris Agreement, also includes phasing in production from new discoveries.”

While disclosing the offer of ownership interest in 27 exploration licenses on the NCS in the APA 2023 licensing round with 17 of these licenses coming with operator status, Aker BP underlined that the award would serve to consolidate its position among the most active independent exploration companies on the NCS.

Per Øyvind Seljebotn, SVP Exploration and Reservoir Development at Aker BP, stated: “We are very pleased with the award that was announced today. It reflects our comprehensive application and gives us a foundation for maintaining our ambitious exploration strategy.”

OKEA has been offered stakes in three new production licenses, which further strengthen its portfolio of near-field exploration opportunities around the Draugen and Statfjord production hubs. The company now has interests in 19 exploration-focused licenses. The new OKEA-operated license, PL 1223, is located in the Norwegian Sea and holds the Galtvort discovery, which will be considered for development towards the Draugen hub.

Morten Krogh, OKEA VP Exploration, said: “The award demonstrates OKEA’s ambition of being an active explorer in our core areas, and we see growth opportunities both in terms of potential new discoveries and new developments towards OKEA infrastructure.”

In APA 2023, Neptune Energy got four new licenses, including three as the operator. The new licenses are all located close to existing infrastructure in the Gjøa area of the Norwegian North Sea, where the company already has a presence, reflecting its exploration strategy to focus on key opportunities within core areas. Neptune is the operator of the Gjøa platform which serves as a hub for four producing fields.

Odin Estensen, Neptune Energy’s Managing Director in Norway, underlined: “Neptune has over the past five years demonstrated its ability to convert exploration success into development and production in a safe, timely and cost-efficient manner. Through this latest licensing round, we continue to build a sustainable exploration portfolio in one of our core areas.”

Vår Energi was awarded 16 new production licenses on the NCS, but only four as operator, in the APA 2023. The Norwegian firm is convinced that continued access to new exploration areas is the foundation for further growth and value creation. The new licenses are in the North Sea, the Norwegian Sea, and the Barents Sea with most of them situated in areas close to existing infrastructure, supporting the company’s hub strategy.

Rune Oldervoll, Vår Energi’s EVP Exploration & Production, outlined: “I’m pleased to see that we are offered licenses in all our key areas on the Norwegian Continental Shelf. We continue to build our diversified portfolio and strengthen our position as a leading operator – especially in the north. All licenses support our long-term growth strategy and give us continuity in our work to develop opportunities and create value.”

As Vår Energi was also offered licenses in the western Barents Sea, Nick Walker, Vår Energi’s CEO, noted: “In addition to further development in and around existing fields, we are intensifying our work to unlock the hydrocarbon potential in the western Barents Sea – building on our leading exploration track record. Norway is a vital supplier of energy to Europe. Access to new exploration acreage is key to maintaining our long-term position as a reliable supplier.”

Another Norwegian player, DNO Norge received participation in 14 exploration licenses, of which three are operatorships, in the APA 2023 licensing round. The company elaborates that ten of these new licenses are in the North Sea and four in the Norwegian Sea. At the end of 2023, DNO held interests in 73 licenses offshore Norway, of which 13 were operated by the company.

Inpex has now received five production licenses in Norway through its subsidiary, INPEX Idemitsu Norge, as part of the APA 2023 licensing round. The awarded licenses are located in the northern North Sea, the southern Norwegian Sea, and the northern Norwegian Sea.

Inpex, which owns interests in numerous licenses in the northern Norwegian Sea, northern North Sea, and Barents Sea, is involved in stable production operations at the Fram and Snorre oil fields in the northern North Sea while actively promoting exploration activities. The five most recently awarded licenses are expected to contribute to the further expansion of the firm’s business portfolio.