Our Arctic Neighbors: Norway awards far north offshore licenses

Companies from all over Europe will be operators of licenses in Arctic; northern Norwegian company joins three partnerships

Sarah Hurst

For Petroleum News

The Norwegian government has decided to offer 38 production licenses in the Awards in Predefined Areas 2009, including 10 in the Norwegian Sea and three in the Barents Sea, the Ministry of Petroleum and Energy said in a release Jan. 19. Another 25 licenses were awarded in the North Sea, below the Arctic Circle.

“Today I am offering production licenses to 42 companies, of which 19 companies have been offered operatorships,” said Terje Riis-Johansen, Norway’s minister of petroleum and energy. “APA 2009 is the seventh licensing round with a focus on mature areas on the whole shelf. The industry’s continuing interest in these areas indicates that the annual licensing rounds in mature areas are working in accordance with the goal of efficient exploration of the mature areas. Offers have been given to large, medium-sized and small companies. This illustrates the diversity of companies on the Norwegian continental shelf.”

Mature areas are the most explored areas on the shelf and have known geology. The main challenge in mature areas is that the expected sizes of discoveries are declining, according to the ministry.

“Small discoveries can often not justify a standalone development, but can be profitable with a tie-in,” the release said. “It is therefore important to discover and develop resources in these areas before existing infrastructure associated with other fields is shut down.”

Arctic licenses

The operators of those licenses will be the UK’s Dana Petroleum, Germany’s Wintershall, Norway’s state-owned Statoil and Bergen, Norway-based Rocksource.

The operators of the licenses in the Barents Sea will be Austria’s OMV, Sweden’s Lundin and Denmark’s DONG Energy.

“With our success in the licensing round we are making significant progress in the implementation of our growth strategy in Norway,” said Harald Vabo, Wintershall Norge’s general manager. “Our near-term plans include both acquisition of new seismic data and reprocessing of old data,” he said. Wintershall is a wholly owned subsidiary of BASF.

Dana Petroleum and its partners in their Norwegian Sea license have committed to seismic reprocessing and acquisition and already recognize two substantial prospects in the blocks there, Dana said in a release Jan. 29.

Northern Norwegian oil company North Energy is one of Dana’s partners in the Norwegian Sea license, having been awarded a 10 percent interest in it. The company also received a 20 percent interest in the Barents Sea license operated by OMV and a 30 percent interest in the Barents Sea license operated by DONG.

“This will strengthen the company’s position in the Hammerfest basin and the northern Norwegian Sea, which are the core areas for North Energy,” said North Energy’s CEO, Erik Karlstrom. The partnership with DONG is in an area adjacent to the Goliat oil and gas field, North Energy noted in its release Jan. 20. The Norwegian government has been making a strong effort recently to encourage northern Norwegian companies to participate in the oil and gas industry in their own region.