|
Our Arctic Neighbors: Offshore development pushed in Norway Oil and gas production will decline if new Arctic areas not opened, report says; fishery, dispute with Russia, both obstacles Sarah Hurst For Petroleum News
Opening areas of the Norwegian continental shelf currently closed to oil and gas activities could increase investment by 200-250 billion kroner ($28.8-$35.9 billion) in 2022-40, according to a new report by industry association KonKraft. The study also found that leaving such acreage closed would hasten the decline in capital spending on the continental shelf, so that investment could be at 20 percent of today’s level by 2030.
“This study focuses on measures which can combat a future decline in oil and gas output,” said Per Terje Vold, chief executive of the Norwegian Oil Industry Association. “It also shows that Norway stands to lose substantial revenues, expertise and investment if today’s politicians fail to make wise choices over the next couple of years. The report identifies opportunities for limiting the expected production fall,” he added.
KonKraft makes proposals for specific measures to help curb a rapid decline in oil and gas production from the Norwegian continental shelf. These include maximizing recovery from existing fields, maintaining a high level of exploration and making a continued commitment to new technology and modes of operation. “The report also points out that making large discoveries is imperative if levels of production and investment are to be maintained,” Vold said. “Opportunities for new finds are greatest in areas currently closed to petroleum activities.”
Plateau reached After almost 40 years of virtually uninterrupted growth, overall production of oil and gas on the Norwegian continental shelf has reached a plateau at a daily rate of 4-4.5 million barrels of oil equivalent, the report said. It is expected to remain at this level for the next seven years, and to start declining around 2015. Oil output has already fallen, but the overall level has so far been kept high by rising gas production.
An estimated 25-65 billion barrels of oil equivalent will remain on the continental shelf in 2015. The range of the estimate is wide because 45 percent of the resources are yet to be discovered, according to KonKraft. In many cases, it will take up to 15 years between the award of a license and production starting, the report said, so decisions taken or avoided today will have major consequences for the level of production and activity in 2020 and beyond.
Areas such as Nordland VI and VII, Troms II, Barents Sea North and the disputed zone with Russia are regarded as the most promising places for finding large oil and gas deposits, the report said. The Nordland VI area is currently protected against all petroleum-related activities, and only seismic mapping is allowed in the Nordland VII and Troms II areas. These blocks are all near the Lofoten region, home to important fisheries for Norway where possible oil and gas development is extremely controversial.
Former CEO says no impact Opening the area around Lofoten would have no negative impact on the fisheries, former Statoil CEO Arve Johnsen told Norwegian newspaper Nordlys in December. “Since the very start, the Norwegian petroleum industry has been more environmentally friendly and environmentally oriented than in any other part of the world. In the course of 40 years, we have not had a single blowout,” Johnsen said.
Northern Norway is entering an unusually interesting 50-year period, which is unprecedented in the region, Johnsen told the newspaper. The petroleum industry will raise the knowledge level and industrial capacity in the region, he added. Johnsen also expressed dismay that there has been local opposition to a 100 percent offshore development of the Goliat oil and gas field in the Barents Sea, which is operator Eni Norge’s preferred plan.
|
