Our Arctic Neighbors: Norway’s far north looking promising

Report ranks areas, all currently closed to development, pressuring government to support industry in data gathering, job creation

Sarah Hurst

For Petroleum News

A new report by Norwegian petroleum industry association KonKraft ranks the most interesting northern exploration areas on the Norwegian continental shelf, as well as highlighting the potential jobs that would be created in the region as a result of increased activity. The report also described the kinds of technology that could be used to develop fields in the far north.

“Forecasts indicate that Norwegian petroleum production will fall markedly over the next decade,” said Per Terje Vold, chief executive of the Norwegian Oil Industry Association. “Access to new and attractive exploration acreage would slow this decline, sustain government revenues to the benefit of the community, keep 250,000 people in work and open opportunities for 1,000 to 2,000 new jobs.”

According to the report, the oil and gas companies have ranked the most promising northern areas as the Nordland VI area, the Nordland VII area, and the Troms II area. These are located progressively farther north, although within the Nordland VII area the central-northern part is considered more promising than the southern part.

“The basic assumption in Nordland VI is that one large oil discovery will be made, together with a medium-sized oil and gas find and some smaller strikes which could eventually tied back to the first two,” the report said. Within Nordland VI, a discovery in the Ribban basin would lie 100 kilometers (62 miles) from the mainland and about 100 kilometers off the main Lofoten islands. One made on the Utrost Ridge would be 200 kilometers (124 miles) from the mainland and about 100 kilometers off Lofoten, the report added. The Lofoten area is home to fisheries where possible oil and gas development is considered extremely controversial.

The report’s assumption for Nordland VII is that the interesting areas lie 60 kilometers (37 miles) from Lofoten and 20-40 kilometers (12-24 miles) off the island of Andoya. There could be a large gas discovery as well as a medium-sized oil and gas find in these areas, according to the report. In Troms II, 20-40 kilometers off the island of Senja, the report assumes that a medium-sized oil field could be discovered.

A large oil discovery is defined by the report as 600-700 million barrels of oil equivalent — on a par with Norne. A large gas discovery is defined as 100 billion standard cubic meters (3,530 billion cubic feet) — on a par with Frigg. A medium-sized oil or gas discovery is defined as 200-300 million barrels of oil equivalent — on a par with Njord or Mikkel.

Subsea development with well streams piped to land is seen as a good option for many of these areas, the report said.

“A solution of this kind could create substantial local spinoffs, including jobs. Subsea installations are also overtrawlable and thereby have no impact on fishing,” it continued. The cost of different solutions has not been analyzed in the report. The most important factors for comparison with an offshore solution are field size and distance to land, the report said.

“Gas can be piped today over longer distances than oil. …Technology development will concentrate on ensuring that crude from Nordland VI could be landed,” the report said. “A subsea solution with well stream transport to shore would require a relatively substantial resource base to be profitable. … For smaller fields, offshore solutions are likely to be the most appropriate. Technological progress up to the time of a possible development could mature a landfall option.”

A number of areas on the Norwegian continental shelf are immature as possible petroleum provinces, with very little data gathered, according to the report. That applies to the area of overlapping claims between Norway and Russia in the Barents Sea, the northern Barents Sea, Svalbard and Jan Mayen.

“Securing information about the potential for oil and gas exploration in these areas will be very important over the next few years in order to improve the basis for analysis and decision-making by government and industry,” the report said. The report also recommended that the government establish environmental standards for operating in these waters at an early stage.