RESOURCE REPORT EXPLORATION 2018
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RESOURCE REPORT EXPLORATION 2018 R E S O U R C E R E P O R T E X P L O R AT I O N 2018
CONTENTS
CHAPTER 1: INTRODUCTION AND SUMMARY 5-12
CHAPTER 2: EXPLORATION ON THE NCS 13-24
CHAPTER 3: UNDISCOVERED RESOURCES 25-32
CHAPTER 4: PROFITABILITY OF EXPLORATION 33-38
CHAPTER 5: PLAYER PICTURE IN THE EXPLORATION PHASE 39-44
CHAPTER 6: NEW EXPLORATION TECHNOLOGY AND
WORK PROCESSES 45-53
CHAPTER 7: EXPLORATION LOOK-BACK ANALYSES 55-65
CHAPTER 8: RESOURCES FOR THE FUTURE: SEABED
MINERALS AND GAS HYDRATES 67-72
R E S O U R C E R E P O R T E X PLO R AT I O N 2018 3
F O R E WO R D CHAP TER 1
INTRO DUC TIO N AN D SUM MARY
P
roduction of oil and gas from the Norwegian has been shown by the industry in the latest licensing
continental shelf (NCS) is expected to rise rounds and, after a couple of years with lower explora-
over the next few years. This increase reflects tion drilling, activity has started rising again. This is
contributions from discoveries under develop- important for ensuring that the resource potential gets
ment as well as output growth from fields already proven and produced.
on stream. Production from these sources will begin Discoveries in recent years have been smaller than
to decline from the mid-2020s, and resources which before. In areas with existing infrastructure, even very
have still to be discovered will start making their small finds can be tied back to existing fields and con-
mark. Several years pass between a discovery and tribute to substantial value creation. The NPD’s analy-
bringing it on stream, so making new and large dis- ses show that exploration has been profitable in all
coveries quickly is necessary for maintaining pro- parts of the NCS. Continuing to explore actively in both
duction at the same level from the mid-2020s. known and less familiar areas will therefore be impor-
The main job of the Norwegian Petroleum Directo- tant. A diverse range of players contributes to this.
rate (NPD) is to contribute to securing the greatest Finding oil and gas deposits is becoming increasingly
possible value for society from oil and gas operations difficult. Technological advances have provided better
through efficient and prudent resource management, data and improved tools, contributing to new under-
which takes account of health, safety, the environment standing and making it possible to identify new play
and other users of the sea. A good factual and knowl- and prospect concepts. This trend will continue in com-
edge basis is a prerequisite for the government to play ing years. Integration of broad and deep geoscientific
a decisive role in resource management. expertise and digital technology will probably be the
In this report, the NPD presents an updated over- key to identifying new resources in coming years.
view of the undiscovered petroleum resources on the This report collates information and presents a
NCS. It shows that roughly 55 per cent of expected oil number of analyses which will form part of the knowl-
and gas resources remain to be produced after more edge base for both government and industry. These
than 50 years of activity, and that just under half of analyses are intended to provide the basis for learning
these are still to be discovered. and for good exploration decisions, which can help to
The NPD’s updated estimate for undiscovered re- maintain exploration and the level of production in the
sources is 4 000 million standard cubic metres of oil future.
equivalent (scm oe). That represents an increase of Deposits of minerals with rare earth elements are
almost 40 per cent from the previous figure in 2016. found on the seabed in many parts of the world, and
The big growth results from the NPD’s mapping of interest in the commercial exploitation of such re-
resources northwards in the Barents Sea close to the sources is dawning. On the NCS, seabed minerals are
boundary with the Russian sector. Estimated undiscov- known to exist in the deep parts of the Norwegian Sea.
ered resources in the open part of the Barents Sea, The NPD is due to launch its own investigations in the
the North Sea and the Norwegian Sea are more or summer of 2018. This might become a new chapter in
less unchanged. Almost two-thirds of the undiscovered the history of Norway’s marine resources.
resources lie in the Barents Sea, with the rest shared
between the Norwegian and North Seas. The upside
potential is greatest in the Barents Sea, where large
areas remain to be explored. Stavanger, June 2018
These figures reveal that opportunities on the NCS
are still substantial and can provide the basis for oil
and gas production over many decades. The govern-
ment provides a steady supply of exploration acreage
through regular licensing rounds, contributing to im- Torgeir Stordal
portant predictability for the sector. Significant interest Director exploration
4 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 5
CHAP TER 1
I N T R O D U C T I O N A N D S U M M A RY
120 0.6
Substantial remaining resources on the Norwegian continental 300 Undiscovered resources 100 0.5
shelf (NCS) continue to offer big opportunities in both mature and Contingent resources in discoveries
Million scm oe
80 0.4
Success rate
250 Contingent resources in fields
less-explored areas. Increased knowledge, better data coverage, Reserves 60 0.3
Million scm oe
200 Sold and delivered
new working methods and innovative technology open new
40 0.2
150
20 0.1
exploration opportunities and can yield a number of commercial 100
0 0
1966-1980 1981-1990 1991-2000 2001-2010 2011-2017
discoveries. The companies must explore and discover more in 50
Average discovery size (excl. RC6)
order to maintain activity and production over time. 0 Technical success rate
1970 1980 1990 2000 2010 2020 2030 Commercial discovery rate
Figure 1.4 Historical and expected future production from Figure 1.5 Development of average discovery size and ave-
the NCS to 2030. rage technical and commercial success rates.1 Discovery size
is based on today’s estimate, not that reported at the time of
N
discovery.
ext year will be the 50th anniversary of the to adopt purposeful measures aimed at stimulating
Ekofisk discovery in the southern part of the activity while increasing diversity and competition on
NCS. This event generated great interest in the NCS. Combined with rising oil prices, these me-
exploring off Norway, and a number of sub- asures led to a sharp increase in exploration wells. decline. From around 2025, a steadily larger propor-
SOFT LANDING
stantial discoveries were made over the next 20 years. New companies entered and a number of commercial tion of production must come from as yet undiscovered
After a sharp growth in wells and spending during
About 70 per cent of proven resources were found in discoveries were made, with 16/2-6 Johan Sverdrup as
2005-14, the level of costs and the oil price slump resources (figure 1.4). If production and the level of
the period up to 1990 (figure 1.1). the largest.
in the late autumn of 2014 led to cuts in exploration activity are to be maintained at current levels, there-
Since the first commercial oil discoveries were
budgets, postponed investment and fewer exploration fore, more exploration is needed and new resources
made, Norway has established itself as an important About 1075 wildcat wells
wells. Their number declined from 57 in 2014 to 36 in must be proven.
player in international oil and gas markets. 12000
2016. Measures were also adopted by the industry to
Accumulated resources (million scm oe)
Johan Sverdrup DEVELOPMENT FEATURES
enhance productivity and efficiency while cutting costs.
SUBSTANTIAL VALUE 10000
Ormen Lange The decline flattened out in 2017, and exploration in Discoveries are smaller. On average, discoveries
Oil and gas from the NCS have generated massive
2018 is expected to be higher than in the two preced- in recent years have been smaller than before (figure
revenues to help make Norway a very wealthy country 8000
Snøhvit ing years. Activity remains relatively high in a histori- 1.5) – a natural development in a mature petroleum
today. The petroleum sector is the country’s largest
Troll Øst cal perspective. province. Mature areas are characterised by known
industry measured by value creation, government re- 6000
geology, normally fewer and smaller technical challen-
venues, investment and export value.
SUBSTANTIAL RESOURCE POTENTIAL ges, and well-developed or planned infrastructure. The
Petroleum operations accounted in 2017 for about 4000
Despite more than 50 years of exploration, the NPD’s bulk of the acreage opened for petroleum operations
14 per cent of Norway’s gross domestic product (figure
assessment is that big opportunities still exist on the is now mature. Big undiscovered resources remain in
1.2). They were responsible for 19 per cent of total 2000 Statfjord
NCS. The resource accounts indicate that about half of mature areas, which could provide the basis for new
investment and 17 per cent of government revenues. Ekofisk
Norway’s total petroleum resources are left to produ- finds. These resources could represent substantial
Sales of oil and natural gas provided some 40 per cent 0
ce. Roughly 53 per cent of the expected remaining re- value.
1966
1980
1990
2000
2010
2017
of total Norwegian export value in 2017.
sources lie in fields and discoveries, while 47 per cent The trend for the technical success rate shows
Figure 1.1 Resource growth on the NCS 1966-2017. that increased knowledge, more and better data, and
remain to be found.
PURPOSEFUL MEASURES
The NPD’s updated mapping has led it to raise its technological progress have helped to make explora-
Exploration activity measured by annual exploration
estimate of undiscovered resources from around 2 900 tion more efficient since the first well in 1966. Despite
wells has fluctuated partly in line with oil price trends
standard cubic metres of oil equivalent (scm oe) to some decline for the average success rate in recent
Number of exploration wells (spudded)
70 Exploration wells 120
(figure 1.3). It declined from the 1990s to bottom out
Oil price (nominal) 4 000 million. Considerable uncertainty attaches to years, it has remained at a high level from the 1990s.
in 2005 at 12 wells. That prompted the government 60
USD/bbl (previous year)
100
this estimate, particularly for the little-explored areas The commercial success rate has remained more or
50
80 in the Barents Sea and around Jan Mayen. less unchanged since petroleum operations began,
40 Total remaining resources provide the basis for even though the average discovery size has been de-
60
14% 17% 19% clining. Exploration on the NCS remains profitable.
30 petroleum production over many decades to come.
40% 40
Today’s forecast for future oil and gas output shows
20
10 20 an increase until the mid-2020s, followed by a gradual
1 Discoveries not very likely to be recovered – resource class 6 (RC6) – are not
Share of Share of Share of Share of 0 0
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
GDP government total total exports included when calculating average discovery size. All discoveries are included in
revenues investments calculating the technical discovery rate. The commercial discovery rate excludes
discoveries in RC6. An estimated assessment has also been made for new disco-
Figure 1.2 Macroeconomic indicators for the petroleum Figure 1.3 Developments in exploration wells spudded. veries in resource class 7 (RC7) – in other words, those which have not been
sector 2017. evaluated. See figure 1.10 for the NPD’s resource classification system.
6 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 7
CHAP TER 1
I N T R O D U C T I O N A N D S U M M A RY
60 120 tures which could contain large quantities of oil and declined substantially in recent years in line with cost
6000 gas (figure 1.8). cuts and downsizing by the companies.
50 100
Number of companies
40 80 5000 Resources are harder to find – calls for techno- Gas calls for collaboration and a joint effort. Gas
logy and expertise. Finding new petroleum resources accounts for roughly half the undiscovered resources.
USD/bbl
30 60 4000 is becoming increasingly difficult in areas with a long Since the average discovery size is declining, many
4000
Million scm oe
exploration history. Exploration takes place to a great small gas finds are likely in the opened areas. The
20 40
3000 extent in areas which have been open to oil and gas infrastructure in the North and Norwegian Seas is well
2535
activities for many years, so additional data must be developed (figure 1.9). As more spare capacity beco-
10 20
2000 acquired or existing information reanalysed to obtain mes available, interest among the companies in also
0 0 new understanding. Seismic surveys and data from exploring for small gas deposits could increase.
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2000
2001
2002
2003
2004
2005
2006
1000 exploration wells are the geologists’ most important Almost two-thirds of the undiscovered gas is ex-
725 740
European gas/power companies Majors basis for establishing new plays. Technological advan- pected to lie in the Barents Sea. That emphasises the
Small companies Large Norwegian companies 0 ces have provided new and better tools which con- significance of this area for long-term output. Cur-
Medium-sized companies Oil price (nominal) North Sea Norwegian Sea Barents Sea Total tribute to steady improvements in understanding the rent gas transport capacity from the Barents Sea is
Figure 1.6 Players on the NCS by size, 2000-17. Figure 1.7 Estimated undiscovered resources by area. sub-surface. limited to the liquefaction plant at Melkøya. Under
Collating and integrating all available data are also existing plans, capacity there will be fully utilised until
very important for making new discoveries. Expertise the early 2040s. Lack of infrastructure and spare gas
Even very small discoveries can become commercial ries are greatest in little-explored areas. New discove-
and experience are crucial here. In a long-term per- transport capacity affects exploration. Where the
when they are phased in to existing fields or devel- ries in the Barents Sea will be increasingly important
spective, therefore, it is a matter of concern that ap- companies are concerned, finding gas which does not
oped in coordination with other finds. Coordinated as production further south on the NCS begins to decli-
plications to study traditional petroleum subjects have
development of several discoveries normally reduces ne from around 2025.
unit costs and lowers the threshold for exploration and Half the undiscovered resources in the Barents Sea 10° 0° 10° 20°
development. Achieving commercial production from lie in unopened areas of the far north. The NPD’s map-
BARENTS SEA
smaller finds located far from existing infrastructure is ping of parts of these areas has identified big struc- 75°
more demanding.
NORWEGIAN SEA
Diversity creates competition. A broad variety of 20˚ 40˚
80°N 60° Faroe Islands
companies, both large and small, creates competition
3000 2400 1800 1200 600 milliseconds
which encourages efficiency and a diversity of ideas in
Km Kvitøya
the exploration phase.2 The number of players on the 0 75
NCS has increased from the mid-2000s, partly as a re-
sult of measures to create greater diversity. Although Svalbard
the total has declined somewhat since 2013, variety Kong Karls Land
remains high (figure 1.6).
Kong Karl Platform NORTH SEA 70°
A trend in recent years has been that the majors are
exploring less actively and cutting back on or with- Storbanken High
drawing from the NCS. This can be viewed in relation
to such factors as the fall in oil prices and a decline in Norway
expected discovery size. When the large companies 76˚ Sweden Russia
reduce their exploration activity, the medium-sized and Finland
small players become increasingly important. Maintain- Olga Basin
ing a positive combination of active and experienced 75°N
large and medium-sized companies, more focused Sentralbanken High Undiscovered resources
74˚30 1800
Gardarbanken High Contingent resources in discoveries
exploration companies and new company creations for Bjørnøya 55°
1600 Contingent resources in fields 65°
both exploration and production is important for con- Reserves
Million scm oe
1400
tinued efficient exploration of the NCS.
Denmark 1200
Most and biggest in the far north. Most of the un- 1000
discovered resources are expected to lie in the Barents Figure 1.8 Large structures and the extent of the mapped
10° 20° 800 30°
Sea (figure 1.7). Opportunities for making big discove- area in Barents Sea North (time contour map for the top of 600
Figure 1.9 Existing gas infrastructure and expected
the Permian).3
remaining gas resources. 400
200
0
2 See the resource report for 2017 at www.npd.no for analyses of the player 3 The NPD’s report on Geological assessment of petroleum resources in eas- North Sea Norwegian Sea Barents Sea
picture in the development and operation phases. tern parts of Barents Sea North 2017.
8 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 9
CHAP TER 1
I N T R O D U C T I O N A N D S U M M A RY
justify an independent export solution is of little value. CHAPTER 3: UNDISCOVERED RESOURCES The industry has long worked purposefully to avoid for metals and rare-earth elements (REEs).
Gas discoveries in the Barents Sea therefore depend to Total undiscovered resources are estimated to lie bet- biases in the decision basis, but a number of analyses On the NCS, seabed minerals are known to exist
a greater extent on unitisation and coordinated devel- ween 2 330 (P95) and 6 200 (P05) million scm oe. The show that an improvement potential still exists. That in the deep parts of the Norwegian Sea. Mapping has
opment. At the same time, it will be more difficult to expected value is 4 000 million scm oe, up by 37 per finding is underlined by the NPD analyses presented in identified both manganese crusts and sulphides.
discover sufficient gas resources which can support cent from 2 920 million scm oe in 2015. This increa- this chapter. Gas hydrates could become a future energy source.
new infrastructure unless the companies explore for se primarily reflects a new estimate for Barents Sea These are found in large quantities immediately be-
them. North in 2017. The NPD’s mapping there has identified CHAPTER 8: RESOURCES FOR THE FUTURE: neath the seabed in some parts of the Norwegian and
large structures which could yield substantial oil and SEABED MINERALS AND GAS HYDRATES Barents Seas. No solution currently exists for profit-
HARD WORK AND INTELLIGENT CHOICES gas discoveries. The updated estimate for undiscover- The greater attention being paid to producing energy able production of such deposits, but research on
Substantial opportunities remain on the NCS. More ed resources shows that the total amount remaining with a low carbon footprint is expected to mean an recovery methods is under way internationally.
than half the expected resources are still in the gro- could provide the basis for oil and gas production over increased need for natural gas and a growing demand
und, and half of these are yet to be discovered. Inn- many decades to come.
ovative technology and better-quality data open new RESOURCE CLASSIFICATION AND RESOURCE ACCOUNTS AT 31 DECEMBER 2017
opportunities, including in mature areas. Spare capa- CHAPTER 4: PROFITABILITY OF EXPLORATION
city in existing infrastructure as well as cuts in explo- Exploration in the past decade has contributed sub- THE NPD’S RESOURCE CLASSIFICATION Reserves and contingent resources represent total
ration and development costs have lowered the thres- stantial value to society. The net present value of this SYSTEM discovered recoverable resources. They are broken
hold with regard to exploring for and producing small activity over these 10 years, at discount rates of four Petroleum resources are divided into classes which re- down in turn into sub-classes which reflect their sta-
discoveries. and seven per cent, was about NOK 930 billion and flect the level of knowledge about the quantities invol- tus before and after important decision gates in the
Bigger finds are also needed if production is to be NOK 560 billion respectively. Exploration has been ved and the maturity of development projects. These process of maturing projects up to development and
sustained. Relatively large discoveries are still possible profitable in all areas. classes correspond to a great extent with those used recovery (production).
in known and mature areas. However, the potential in internationally recognised classification systems. Undiscovered resources are broken down into esti-
for making large finds which can support new infra- CHAPTER 5: PLAYER PICTURE IN THE mated but unproven petroleum resources in mapped
structure and contribute to a high level of production EXPLORATION PHASE The resource classes are: prospects and estimated but unproven recoverable
is greatest in little-explored areas – and particularly A broad variety of companies creates competition, • reserves petroleum resources related to plays (fact box 3.2).
areas which have still to be opened. which promotes efficiency and value creation in the • contingent resources
But resource opportunities will not just happen. exploration phase. That contributes to greater diver- • undiscovered resources.
Hard work and intelligent choices are needed to ensure sity of ideas and interest in different plays, technolo-
that resources in both mature and less-explored areas gies, and play and prospect concepts. The number of
contribute to maintaining production and creating players on the NCS has increased from the mid-2000s, Undiscovered 8
value. partly as a result of measures to create greater diver- resources Leads and unmapped
Prospects
resources
sity. Although their total has declined somewhat since
SUMMARY 2013, variety remains high.
CHAPTER 2: EXPLORATION ON THE NCS
Trends for exploration on the NCS and in its various CHAPTER 6: NEW EXPLORATION TECHNOLOGY Contingent 7F
sea areas are presented. After a number of years with AND WORK PROCESSES resources New discoveries
that have not
a high level of activity, exploration declined from 56 In order to understand better how progress with te- been evaluated
wells in 2015 to 36 in 2016 and 2017. However, 40-50 chnology and geological methods has contributed to Reserves Historical
exploration wells are expected in 2018. efficient exploration, the NPD carried out a study in production
Substantial interest has been shown in new explora- collaboration with consultant Westwood Global Energy 6 5F 4F 3F 2F 1 0
Recovery Recovery In the Approved Sold and
tion acreage during the latest licensing rounds. This Group. This identified a number of areas within a wider likely,
Decided
plan for In
not very planning by the delivered
probably partly reflects new understanding based on exploration technology concept, such as data acqui- likely but not phase licensees development production petroleum
clarified and operation
better seismic data and well results which have led to sition, geosciences and working methods, which have
5A 4A 3A 2A
new play and prospect concepts. Cost cuts and access either been or are expected to become important for
to infrastructure capacity are other important factors. exploration on the NCS.
On average, discoveries in recent years are smaller 7A
Possible future
than before. Smaller finds and fewer wells will make CHAPTER 7: EXPLORATION LOOK-BACK measures to improve
it demanding to maintain production over time. The ANALYSES recovery
number of wells drilled and the size of discoveries Earlier NPD analyses have shown that the compani-
Figure 1.10 The NPD’s resource classification system (www.npd.no).
made must be above the average for the past decade if es exaggerate resource expectations and understate
production is to be sustained at a high level. Opportu- the probability of success in drilling. This means their
nities for making larger finds are probably greatest in exploration portfolios systematically deliver below
less-explored areas. expectations.
10 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 11
CHAP TER 1 CHAP TER 2
I N T R O D U C T I O N A N D S U M M A RY E XPLO R ATIO N O N TH E NCS
RESOURCE ACCOUNTS AT 31 DECEMBER 2017 The amount remaining to be produced is estimated
The NPD’s estimate for total proven and unproven pe- at 8.5 billion scm oe. Proven resources account for 4.5 The companies must explore and make
troleum resources on the NCS is about 15.6 billion scm billion of this. Estimated unproven resources come to
oe. Of this, 7.1 billion or 45 per cent have been sold four billion scm oe, or about 47 per cent of remaining larger discoveries in order to maintain
and delivered (table 1.1). resources.
production on the Norwegian continental
Total petroleum resources on the Norwegian continental shelf at 31 December 2017 shelf at a high level.
Oil Gas NGL Condensate Total
mill scm bn scm mill tonnes mill scm mill scm oe
Produced 4 261.4 2 341.1 200.3 117.3 7 100.3
Reserves* 1 131.1 1 729.1 109.5 20.7 3 088.9
Contingent resources in fields 338.2 241.3 20.8 2.4 621.5
Contingent resources in discoveries 275.0 293.4 15.2 1.9 599.2
Production not evaluated (RC7A) 130.0 70.0 200.0
Undiscovered resources 1 995.0 1 870.0 135.0 4 000.0
Total 8 130.7 6 544.9 345.8 277.4 15 610.0
* Includes resource classes 1, 2 and 3
Table 1.1 Total petroleum resources on the NCS at 31 December 2017.4
12
10.9 Total resources:
10 15.6 billion scm oe
8.5
8 26%
6.7
6
5.4 5.7 45%
4%
Billion scm oe
4 4.2 4.3
3.4 3.2 5%
2
20%
Liquid
Total
Gas
0
2.3 Undiscovered resources
Contingent resources in discoveries
-2 4.8 Contingent resources in fields
Reserves
7.1
-4 Sold and delivered
-6
-8
Figure 1.11 Petroleum resources and uncertainty in the estimates at 31 December 2017.
4 Oil and condensate are specified in million scm, natural gas liquids (NGL) in million tonnes, and gas in billion scm. The conversion factor from tonnes to scm
for NGL is 1.9. Total oil equivalent is specified in million scm oe.
12 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 13
CHAP TER 2
E X P LO R AT I O N O N T H E N C S
The government provides a steady supply of
exploration acreage through regular licensing
FACT BOX 2.1: Exploration wells
• Exploration well. Drilled to prove a possible
rounds. Great interest has been shown by Well type Purpose Area petroleum deposit or to secure information for
delineating a possible deposit. A collective term
the industry in the most recent of these. After
North Sea Norwegian Sea Barents Sea
Exploration wells 1 654
Appraisal 1 092 733 242 117 for wildcats and appraisal wells.
Wildcats 562 453 81 28
a couple of years with reduced activity, the Total 1 654 1 186 323 145 • Wildcat. Drilled to investigate whether a possi-
ble deposit contains petroleum.
number of exploration wells is rising again. It Table 2.1 Number of exploration wells spudded by category
and area (at 31 December 2017).
• Appraisal well. Drilled to determine the size
is important that the industry maintains a high and extent of a petroleum deposit already pro-
ven by a wildcat.
level of exploration. the first time (figure 2.2) with a record 17 wells drilled
there. While a decline has been forecast in the Barents
Sea for 2018, drilling in the North and Norwegian Seas
E
is expected to rise.
xploration is influenced by such factors as DEVELOPMENTS IN EXPLORATION over time in line with new knowledge about the reser-
expected prospectivity, available acreage, the ACTIVITY FROM 1965 TO 2017 DISCOVERIES ARE SMALLER voir.
regulatory framework, costs and the level of The first exploration well on the NCS was drilled in A high level of exploration in recent years has resulted The decline in average discovery size reflects the
oil and gas prices. A long-running increase 1966 (see fact box 2.1). A total of 1 654 such wells had in many discoveries (figure 2.3). On average, these are fact that the NCS has become more mature (figure
in activity which began in 2006 ended in 2016 after been spudded by 31 December 2017 (table 2.1). smaller than before. 2.5). However, even very small finds can show good
a substantial drop in oil prices. While 56 exploration Exploration has varied substantially over this 50- International experience shows that the biggest profitability if existing infrastructure is used effectively
wells were drilled in 2015, the annual figure for 2016 year period (figure 2.1). The first peak was reached in finds are made early in the exploration phase of a new (see more in chapter 4). Maintaining a high level of
and 2017 was 36. However, 40-50 are expected in the mid-1980s, with up to 50 wells per year. From the petroleum province, and that discovery size declines as exploration is important for identifying and developing
2018. end of the 1990s, activity declined to a low point of 12 the latter matures. This also applies to the NCS (figure small discoveries while the big installations are still on
Substantial interest has been shown in new explora- wells in 2005. It then began to recover, and 65 wells 2.4). With the exception of Ormen Lange in 1997 and stream.
tion acreage during the most recent licensing rounds. were spudded in 2009. The post-2006 increase reflect- Johan Sverdrup in 2010, the largest finds were made in
This partly reflects new understanding based on better ed changes to exploration policy combined with rising the first 20 years and discovery size has declined from RESOURCE GROWTH AND PRODUCTION
seismic data and well results, which have led to new prices. Activity remained by and large high until 2015, the mid-1980s. The average discovery size (excluding The reduction in average discovery size has also meant
play and prospect concepts. Cost cuts and access to but the steep slump in oil prices led to a substantial resource class 6 (RC6) – see chapter 1 for a definition) a decline in resource growth over time. It has been
infrastructure capacity are other important factors. fall over the past two years. Nevertheless, the level is over the past seven years has been about seven mil- substantially smaller from discoveries over the past
Discoveries above the average size for the past dec- still high compared with 1998-2005. lion standard cubic metres of oil equivalent (scm oe). 30 years than in the first two decades of Norwegian
ade must be made if production is to be sustained at Historically, the largest annual number of explora- Discovery size in figures 2.4 and 2.5 is based on the oil history. Figure 2.4, showing resource growth from
a high level. Opportunities for making larger finds are tion wells has been drilled in the North Sea. In 2017, current estimate, not that reported when the discovery discoveries by size, illustrates the trend. Resource
greatest in little-explored areas. however, the level was highest in the Barents Sea for was made. The original estimate can differ from the growth in the various sea areas is presented in fact
current figure. Discovery size can increase or decrease box 2.5.
5000 < 5 mill. scm oe
Number of exploration wells (spudded)
Number of exploration wells (spudded)
70 Appraisals 70 Barents Sea 16
7 5 - 10 mill. scm oe
Wildcats Norwegian Sea 4500 15
140 Number of discoveries (excl. RC6) 10 - 50 mill. scm oe
60 60 North Sea Number of discoveries in RC6 4000 4
44 50 - 100 mill. scm oe
120 11
50 50 3500 > 100 mill. scm oe
Number of discoveries
25
Million scm oe
100 3000 9
40 40
80 2500
30 30
60 2000 11
61
20 20 1500 15
40 8
21
10 1000 95
10 2 14
20 20 84
500 4 17
0 0 1 16
0 0
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
1967-1980 1981-1990 1991-2000 2001-2010 2011-2017 1967-1980 1981-1990 1991-2000 2001-2010 2011-2017
Incl. RC6
Figure 2.1 Exploration wells spudded. Figure 2.2 Exploration wells spudded by area. Figure 2.3 Discoveries. Figure 2.4 Resource growth by discovery size. The number
of discoveries is shown in the bars.
14 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 15
CHAP TER 2
E X P LO R AT I O N O N T H E N C S
1800
2000 16th round
100 1967-1980 1600 Resource growth 2001 NSA2000 No awards in 2005
2002 17th round NSA2001
90 1981-1990 1400 Production 2003 NSA2002 APA2003
1991-2000 2004 18th round APA2004
80 1200
Million scm oe
2001-2010 2006 19th round APA2005
70 2007 APA2006
2011-2017
Million scm oe
1000 2008 APA2007
60 2009 20th round APA2008
800 2010 APA2009
50
2011 21st round APA2010
40 600 2012 APA2011
30 2013 22nd round APA2012
400 2014 APA2013
20 200 2015 APA2014
2016 23rd round APA2015
10 2017 APA2016
0
0 2018 APA2017
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
North Sea Norwegian Sea Barents Sea 0 10 20 30 40 50 60 70 80
Incl. RC6 Excl. RC6 Licences awarded since 2000
Figure 2.5 Average discovery size by area. Figure 2.6 Annual resource growth and production. Figure 2.9 Annual licence awards since 2000.
During the first decade after Ekofisk was found in further development of new and known plays based on LICENSING ROUNDS Introduced in 2003, the APA scheme is intended to
1969, the big Statfjord, Sleipner Vest, Gullfaks and additional seismic surveys and continuous exploration Two types of licensing rounds with equal status are ensure efficient exploration of mature areas and to
Oseberg fields were discovered and are still on stream. drilling, combined with improved interpretation tools conducted on the NCS – numbered, and awards in prove time-critical resources close to planned and ex-
Most of the other largest fields followed in 1979-84 and methods (see chapter 6). Infrastructure expan- predefined areas (APA).5 APA rounds have taken place isting infrastructure (fact box 2.3). It is important that
(figure 2.6). Almost 65 per cent of all proven resources sion, further progress with new development concepts annually since 1999, while the numbered rounds in acreage awarded gets explored quickly and efficiently
were found in this period. The figure shows that, with and innovative drilling technology have also made it fi- less-explored exploration areas are generally staged so that existing infrastructure can be utilised in the
the exception of Ormen Lange and Johan Sverdrup, nancially interesting to explore ever-smaller prospects. every other year. These regular rounds contribute to best possible way and small discoveries are phased
resource growth from exploration has been low for important predictability for the industry. The scope of in swiftly if spare capacity is available. As new areas
the past 30 years. By and large, the annual figure has ACCESS TO ACREAGE awards is presented in figures 2.9 and 2.10. become mature, the APA coverage has been expanded
been smaller than production over the past two dec- The government gives great emphasis to making acre- The first licensing round in 1965 was clearly the on the basis of established criteria. See report no 28
ades. Output has largely come from fields discovered age regularly available, which is important for maintai- most extensive in terms of acreage on offer. While the (2010-2011) to the Storting on the petroleum sector as
in production licences awarded from 1965 to the early ning interest in exploration and ensuring the develop- first four rounds were confined to the North Sea, parts an industry for the future. One of the following criteria
1990s. ment of commercial discoveries. Companies primarily of the Norwegian and Barents Sea were opened for must be met: the area is close to infrastructure, has
Figure 2.7 presents resource growth by decade of gain access to acreage through licensing rounds, but exploration from the fifth round held in 1980-82. an exploration history, or borders on existing prede-
licence award. Almost half the total resource growth can also buy or swop licence interests.
from exploration (by decade of licence award) has In line with the growth in the number of companies 160 Licensed
Awarded APA 2003
come from discoveries in licences awarded in the first and licences, and with oil price trends, the secondary
140 Relinquished
to fifth licensing rounds (before 1980). Many of the market (acquisition, swop and sale) for interests has
exploration wells drilled over the past decade were expanded substantially since 2007. It peaked in 2013
120
located in pre-1980 acreage. That partly reflects the (figure 2.8).
100
12000
80
10000
1000 km
60
Million scm oe
8000
Number of farm-ins and asset swops
160 120 40
6000
Oil price (nominal) USD/bbl
140
100
4000 120 20
80
2000 100
0
80 60
0
60 -20
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
40
40
Awards NSA/APA Awards 1980s 20 -40
20
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
2011
2013
1995
1997
1999
2001
2003
2005
2007
2009
2015
2017
Awards from 2000 (numbered rounds) Awards 1970s
0 0
Awards 1990s Awards 1960s
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Incl. RC6 Figure 2.10 Acreage awarded, licensed and relinquished.
Figure 2.7 Resource growth by decade of licence award. Figure 2.8 Farm-ins and swops of licence interests.
5 They were called North Sea awards (NSA) from 1999 to 2002.
16 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 17
CHAP TER 2
E X P LO R AT I O N O N T H E N C S
0° 2° 4° 6° 8° 10° 16° 18° 20° 22° 24° 26° 28° 30° 32° 34° 36° 38°
FACT BOX 2.2: Work programme 68°
68° 74°
The government attaches obligations (a work ned. If not, it lapses. Should a commercial disco-
programme) to production licences. Changes have very be made, the licensees must decide whether
74°
occurred with these programmes as the NCS has a plan for development and operation (PDO) is to
matured. In the early rounds, when the NCS ran- be submitted. This process, with average figures
ked as a frontier area and information was lacking, from 2000, is illustrated in figure 2.11.
requirements often involved acquiring seismic data Licences which require a fixed number of wells
and drilling a specific number of firm wells. In the to be drilled are still awarded in APA rounds, but
72°
APA rounds covering mature areas, a licence is on a smaller scale than before. This is because the 66°
often required to acquire seismic data, through eit- largest and best-defined structures have already 66° 72°
her purchases or surveys. A “drill or drop” obliga- been drilled. Mapping remaining prospects is
tion is also imposed. This means that the licensees harder, and more extensive geoscientific analyses
have one-three years to decide whether to spud a are often needed before a drilling decision can be
wildcat. If they decided to drill, the licence is retai- taken.
Hammerfest 70°
Vadsø
70°
18° 20° 22° 24° 26° 28° 30° 32°
64°
Discovery Commercial 64° Discoveries and fields
Drill exploration well? in the licence? discovery Develop- Oil APA area
ment Gas Licensed acreage
Stjørdal Oil w/gas Announced blocks
NO: 2% YES: 5% Trondheim Gas/condensate
YES: 7%
NO: 18% Kristiansund
YES: 25%
Molde
NO: 75%
Figure 2.11 From award to development. Ålesund
2° 4° 6° 8° 10°
fined areas but has not been applied for in numbered The 24th round was announced on 21 June 2017 Figure 2.12 Blocks put on offer in the 24th round.
rounds. Predictability about the areas which can be ap- with a deadline of 30 November 2017 for applications.
plied for, with a steady addition of new acreage, is im- It included 102 full or partial blocks – nine in the Nor-
2° 4° 6° 8° 2° 4° 6° 8° 10° 18° 20° 22° 24° 26° 28°
portant for the effectiveness of the scheme. Since the wegian Sea and 93 in the Barents Sea (figure 2.12).
Ålesund
APA rounds were introduced, the number of licences 68°
and the amount of acreage awarded have increased APA 2017 AND 2018 62°
Måløy
considerably (figures 2.9 and 2.10). Mature areas of the NCS remain attractive. A new Florø
More acreage has been relinquished over the past record for the number of applications was set by the
decade than before. Faster circulation of acreage was 2017 APA round, with 39 companies applying. This big BARENTS SEA
precisely one of the goals of the APA scheme. Stricter interest partly reflected access to new and improved Bergen 72°
66°
work programmes (fact box 2.2) and an increased area seismic data. Large parts of the NCS, particularly the 60°
fee mean that licensees must work faster to evaluate mature areas of the North and Norwegian Seas, are
prospectivity and relinquish holdings they find unin- now covered by broadband surveys. Combined with Haugesund
NORWEGIAN SEA
teresting. That means this acreage becomes avail- increased computing power and innovative interpreta- Stavanger
Sandnes
able more quickly for other players with new eyes and tion and visualisation tools, that has made it possible Namsos Hammerfest
NORTH SEA
ideas. to identify new exploration opportunities – including in Kristiansand 64°
Farsund
previously explored acreage. 58° APA2017 area
Stjørdal APA2018 expansion
24TH LICENSING ROUND Figure 2.13 shows the extent of the expansion for Trondheim
Licensed acreage
Ahead of the announcement of a numbered licensing the 2018 APA round. Since the 2017 round, the prede- Kristiansund
round, the companies are invited to nominate blocks fined areas have been expanded by 47 blocks in the Molde
Ålesund
they believe should be included. The NPD then prepa- Norwegian Sea and 56 in the Barents Sea. Applications 62°
res a recommendation to the Ministry of Petroleum and can be submitted for all unallocated full or part blocks Måløy
56°
Energy (MPE) on the acreage which should be put on in these areas. Florø
offer.
Figure 2.13 APA 2018 expansion.
18 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 19CHAP TER 2
E X P LO R AT I O N O N T H E N C S
1800 Barents Sea
Norwegian Sea FACT BOX 2.3: Changes to the regulatory fra-
1600 mework and licensing policy
50 North Sea 35 North Sea North Sea
1400
Number of wildcats (spudded)
45 Norwegian Sea Norwegian Sea
Barents Sea 30 1200 Licensing policy in mature areas was revised in
Million scm oe
40 Barents Sea
Number of discoveries
35 25
1999 by establishing the annual NSA rounds, which
1000
30 were further developed in 2003 into the APA. The
20 800
25 aim was to prove and recover commercial resources
15 600 in mature areas before the infrastructure closed
20
15 400 down. Another important objective was to contribu-
10
10 200 te to efficient exploration at the companies by provi-
5 5 ding greater predictability for the industry through a
0
0 regular supply of new acreage.
2007
2009
2010
2011
2000
2001
2002
2003
2004
2005
2006
2008
2012
2013
2014
2015
2016
2017
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2000
2001
2002
2003
2004
2005
2006
2011
2015
2016
2017
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2012
2013
2014
The government also made provision in 2000 for
Incl. RC6
Incl. RC6 admitting new companies, and the offer to pre-
Figure 2.14 Wildcats by area. Figure 2.15 Discoveries by area. Figure 2.18 Accumulated resource growth by area. qualify as operators and licensees was established.
This scheme aimed to help improve predictability for
new companies seeking to become established on
the NCS, either through awards or by farming into
licences.
EXPLORATION TRENDS ON THE NCS, fluctuated between one and 12. Activity increased in ACCUMULATED RESOURCE GROWTH BY AREA A reimbursement system for exploration costs
2000-17 2017, and 17 wildcats were drilled. Overall resource growth in the Norwegian and Barents introduced with effect from 1 January 2005 put
Seas during the past 18 years has been somewhat lo- companies without taxable earnings on an equal
WILDCATS DISCOVERIES wer than in the North Sea (figure 2.18). A total of 257 footing with those which have such revenues in
Developments in the number of wildcats by sea area in Developments in the number of discoveries after 2000 discoveries were made in 2000-17, of which 36 were terms of the tax treatment of exploration expenses.
2000-17 are illustrated in figure 2.14. by area are presented in figure 2.15. The high level larger than 10 million scm oe. One really large find (Jo- The scheme gives companies with a tax-deductible
Relatively few wildcats were drilled in the North Sea of exploration after 2006 resulted in a big increase han Sverdrup) was made in this period, and accounted loss the right to have the tax value (78 per cent) of
during 2000-05, but the number increased substan- in finds. Most were made in the North Sea with the for 24 per cent of total resource growth.6 The biggest their exploration costs reimbursed rather than car-
rying them forward with a supplement for interest.
tially from 2007. Exploration remained high until 2016, exception of 2013, when the Norwegian Sea accounted contributions to resource growth in the Barents Sea
These alternatives have the same financial outcome
with an average of 21 wildcats per year. Only eight for the majority, and 2014 and 2017, when the Barents have come from 7324/8-1 (Wisting), 7220/7-1 (Havis)
for the government. The goal of the reimbursement
wildcats were drilled in the North Sea during 2017. Sea topped the list. and 7220/8-1 (Skrugard). Contributors in the Norwegi-
scheme was to reduce entry barriers by putting new
Exploration in the Norwegian Sea has varied rather an Sea include 6507/5-3 (Ærfugl) and 6406/3-8 Maria. companies in the exploration phase on an equal
more than in the North Sea. Activity there was also SUCCESS RATES Of the 257, 175 are below five million scm oe. Such footing with established players who had taxable
high from 2008, but fell to three wildcats spudded in The average technical success rate (discoveries as a smaller discoveries account for 14 per cent of resource earnings
2016. proportion of wildcats) has varied over time and bet- growth. Fact box 2.5 presents resource growth in the
In the Barents Sea, exploration has varied through- ween the different areas (figures 2.16 and 2.17). It has various areas of the NCS.
out the period. Since 2009, the number of wildcats has lain around 50 per cent in recent years (see chapter 6).
FACT BOX 2.4: Relicensing acreage
Much of the acreage being explored today has
been awarded and relinquished several times (figu-
Discovery
35 Average discovery size 1.00 Dry well re 2.19). Improved seismic data, information from
Success rate (last 5 years)
0.90 60 Success rate (last 5 years) North Sea 1.00 more wells, innovative technology, and new thinking
30 Success rate (yearly) Success rate (last 5 years) Norwegian Sea and ideas mean that petroleum resources are being
0.80 0.90
50 Success rate (last 5 years) Barents Sea proven in areas which have been explored many ti-
25 0.80
0.70 mes before. A number of areas covered by the APA
Million scm oe
Number of wildcats
0.70
Success rate
20
0.60 40 scheme and around the big North and Norwegian
Success rate
0.60
0.50 Sea fields have been awarded four or five times.
15 30 0.50 Although acreage is awarded several times, sub-
0.40
0.40 stantial discoveries can still be made. 16/2-6 Johan
10 0.30 20
0.30 Sverdrup, the Johan Castberg discoveries 7220/8-
0.20 1 (Skrugard) and 7220/7-1 (Havis), and 7220/11-1
5 0.20
10
0.10 (Alta) are good examples.
0.10
0 0
0 0
2017
2008
2009
2010
2011
2012
2013
2014
2015
2016
2000
2001
2002
2003
2004
2005
2006
2007
2011
2012
2013
2014
2015
2016
2017
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Incl. RC6
Figure 2.16 Technical success rate and average discovery Figure 2.17 Technical success rate and wildcats by area.
size.
6 The resource estimate for Johan Sverdrup is about 400 million scm oe,
including phase two of the development project. Source: Equinor
20 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 21CHAP TER 2
E X P LO R AT I O N O N T H E N C S
-10° 0° 10° 20° 30° 40° 0° 10° 20° 30°
NORTH SEA NORWEGIAN SEA 75° BARENTS SEA
7435/12-1 !
7325/4-1
!
<
35/8-6 A
!
34/10-55 S < ! ! 36/7-4
< 7220/6-2 R
! 35/11-20 B !
<
34/11-6 S ! 35/11-20 S !7219/9-2-1
!
7219/12 <
! 7219/12-2 S 7130/4-1
< !30/9-28
30/4-3 S ! S 6608/10-17 S <
! !
! 31/7-1
< 6507/3-12 ! 7121/8-1!
60° 30/11-13 !< 30/11-14 B
BARENTS SEA 30/11-11 S ! 30/11-14
! 30/11-12 S 6507/8-9 !
25/2-18 S 65°
70° 20° 30°
6407/7-9 A Discovery wells completed in 2016-2017
! 16/1-26 S
< !
<
6407/7-9 S ! Oil
! Gas
!
< Oil/gas
SNØHVIT !
< Gas/condensate
0° 10°
70°
Figure 2.20 Discoveries on the NCS in 2016-17.
EXPLORATION RESULTS 2016-17 Sea during 2016 – three wildcats and one appraisal.
Seventy-one exploration wells were completed on the Activity increased in 2017, when a new exploration
NCS in 2016-17, of which 52 were wildcats. A total of record was set with 17 completed wells. Five were
29 discoveries were made, giving a success rate of 62 appraisals. A total of seven discoveries were made in
NORWEGIAN SEA per cent in 2016 and 50 per cent in 2017. The biggest 2016-17.
finds in this period were 36/7-4 (Cara) and 31/7-1 Expectations were high for Statoil’s 7435/12-1 (Korp-
HEIDRUN (Brasse) in the North Sea, and 7219/12-1 (Filicudi) and fjell) wildcat, the very first to be spudded in Barents
ÅSGARD 7435/12-1 (Korpfjell) in the Barents Sea. Figure 2.20 Sea South-East after the area was opened for explora-
shows all the finds made in the period, while fact box tion in 2013. It was drilled on the Haapet Dome, a large
2.5 presents resource growth in the various sea areas. structure close to the boundary with the Russian sec-
Thirty exploration wells were completed in the North tor. Many had hoped for a big oil discovery, but instead
ORMEN
LANGE Sea during 2016 and 12 in 2017. Twelve were apprais- the well encountered small quantities of gas. Although
als. Sixteen of the wildcats encountered hydrocarbons. the result was disappointing, it lay within the NPD’s
While exploration activity in the Norwegian Sea was expected uncertainty range. Preliminary estimates put
low during 2016, with only three wildcats, there was a the size of the discovery at eight to 11.5 million scm
STATFJORD slight increase in 2017 to five wells (four of them wild- oe. Although the find is not commercial at present, the
GULLFAKS cats). Five discoveries were made in 2016-17. well has contributed important new geological knowl-
60°
TROLL Four exploration wells were drilled in the Barents edge about the area.
OSEBERG
Number of times 60°
awarded
1
NORTH SEA 2
3
4
5
6
7
Selected fields
EKOFISK Oil
Gas
Oil w/gas
Gas/condensate
10° 20°
Figure 2.19 Number of times acreage has been awarded.
22 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 23CHAP TER 2 CHAPTER 3
E X P LO R AT I O N O N T H E N C S UNDISCOVERED RESOURCES
Updating the estimate for undiscovered
Fact box 2.5: Exploration curves
resources shows that the amount remaining
1966-2017
9000
16/2-6 (JohanSverdrup)
The exploration curve for 1965-2017 shows
Accumulated resources (million scm oe)
8000
7000
that the largest number of wells drilled and the
biggest resources found were in the North Sea.
provides the basis for exploration and oil and
gas production over several decades to come.
31/6-1 (Troll Øst)
6000 The Norwegian and Barents Sea were opened
for exploration in 1980. More wells were drilled
5000
and resources found in the Norwegian Sea than
31/2-1 (Troll Vest)
4000 in the Barents Sea.
Barents Sea, cumulative
resource growth 1980-2018 In 2000-17, the largest number of wells
3000
33/12-1 (Statfjord)
Norwegian Sea, cumulative drilled and the biggest resources were again
2000 resource growth 1980-2018
found in the North Sea. Resource growth was
6305/5-1 (Ormen Lange) North Sea, cumulative
1000 resource growth 1966-2018 about the same in the Norwegian and Barents
6507/7-2 (Heidrun)
Seas, but with almost twice as many wells
0 7121/4-1 (Snøhvit)
0 100 200 300 400 500 600 700 drilled in the former area as in the latter.
The largest number of wells and the highest
Number of wildcat wells
resource growth in 2015-17 were in the North
2000-2017 Sea. Resource growth in the Barents Sea was
1000
roughly 60 per cent of the level in the North
Accumulated resources (million scm oe)
36/7-4 (Cara)
900 30/11-9 S (Askja Vest) Sea, but fewer wildcats were drilled
800 35/9-7 (Skarfjell)
there. The Norwegian Sea accounted
16/2-6 (Johan Sverdrup)
700 for the smallest resource growth,
600 even though a few more wells
500 were drilled there than in the
Barents Sea.
400 7219/12-1 (Filicudi)
6406/12-3 S (Pil) The horizontal axes show
300 7324/8-1 (Wisting) (Maria)
6705/10-1 (Asterix) the number of wildcats in
200 7220/7-1 (Havis)
(Ivar Aaasen) Barent Sea the order they were drilled.
Norwegian Sea
100 35/2-1 (Peon) When a new discovery is
25/4-7 (Alvheim) North Sea
0 made, the resources in-
0 20 40 60 80 100 120 140 160 180 200 220 240 260 volved are represented as
Number of wildcat wells accumulated values along
2015-2017 the vertical axis. A steep
70 curve shows that a lot of
Accumulated resources (million scm oe)
resources were found with
60 30/4-3 S
relatively few wells, while
50 36/7-4 (Cara) a shallow curve indicates
that proven discoveries were
40 7435/12-1 (Korpfjell) small.
30
31/7-1 (Brasse)
7219/12-1 (Filicudi)
20 6608/10-17 S (CapeVulture)
Barent Sea
6406/12-4 S (Boomerang)
10 Norwegian Sea
North Sea
6706/12-2 (Snefrid Nord)
0
0 10 20 30 40
Number of wildcat wells
Figure 2.21 Accumulated resource growth in the
North, Norwegian and Barents Seas for 1966-2017,
2000-17 and 2015-17.
24 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 25CHAP TER 3
U N D I S COV E R E D R E S O U R C E S
Fact box 3.1: Expected value 4500 Barents Sea Barents Sea North
Norwegian Sea Barents Sea South
The NPD’s updated estimate for undiscovered The estimate for undiscovered resources is un-
certain. Great uncertainty prevails about the
4000 North Sea
3500
resources is 4 000 million standard cubic metres mapped prospects, and even more over the num- 980
1000 986 1370
ber and size of those which have yet to be iden- 3000 800
990 1030 910
of oil equivalent (scm oe), up by almost 40 per cent
Million scm oe
tified. The method used by the NPD to estimate
2500
undiscovered resources (fact box 3.2) quantifies 1260 1275
1400
from the previous figure. This big growth reflects
2000 1300 1500 1594 1750 945 1165
the uncertainty. Estimates are expressed as pro-
1220 1195 1195
bability distributions, not single figures. When 1500
the NPD’s mapping of resources in the northern this report cites the estimate as a single figure, 780 870 850
1000 775 740
the expected value of the probability distribution
part of Barents Sea East. The new estimate shows is used. The example shows that the probability 1400 1200 1170 1200 1190 1175 1175
500 845 850 815 745 725
of finding more than 2 330 million scm oe is 95
0
that remaining resources can provide the basis for per cent, and of finding more than 6 200 million
scm oe is five per cent (figure 3.1).
1996 1998 2000 2002 2003 2006 2009 2010 2012 2013 2015 2017
oil and gas production over many decades.
Figure 3.5 Development in estimates for undiscovered
resources over time. The 2017 estimate includes the eastern
part of the Norwegian sector in Barents Sea North.
T
he NPD regularly updates its estimate for DISTRIBUTION BY AREA Liquids are expected to account for just over half expectations for gas. The main reason in the Norwe-
undiscovered resources on the Norwegian Estimates for undiscovered resources in the North the undiscovered resources. As figures 3.3 and 3.4 gian Sea was further disappointing exploration results
continental shelf (NCS) (see the section on and Norwegian Seas and in Barents Sea South at 31 show, the distribution between liquid and gas varies with large structures in the deepwater areas. Changed
resource classification and resource accounts December 2017 (figure 3.2) are virtually the same as from one sea area to another. expectations of the potential off Lofoten, Vesterålen
at 31 December 2017 in chapter 1). Its previous as- in 2015. and Senja, based on seismic data acquisition and map-
sessment was made in 2015 (see the NPD’s resource Uncertainty in these estimates is greatest in areas HISTORICAL CHANGES ping by the NPD, also affected the results. See the
report for 2016). The calculation method has re- with little information and a short exploration history, The estimate for total undiscovered resources has NPD’s 2010 reports on Petroleum resources in the sea
mained unchanged since the mid-1990s, which pro- such as much of the Barents Sea. That applies particu- varied over time (figure 3.5). New knowledge from areas off Lofoten, Vesterålen and Senja and Geofaglig
vides a good basis for comparing estimates over time. larly to Barents Sea South-East and North. Uncertainty mapping and exploration wells may lead to substantial vurdering av petroleumsressursene i havområdene
is considerably smaller in the North Sea and the well- revisions of the figures, both positive and negative. utenfor Lofoten, Vesterålen og Senja (in Norwegian
UPDATED ESTIMATES FOR UNDISCOVERED explored part of the Norwegian Sea. Over time, however, estimates will reduce naturally as only).
RESOURCES The estimate for undiscovered resources shows prospects are drilled. The background for the 2012 increase in the Barents
Total undiscovered resources are estimated to lie bet- that the amount remaining could provide the basis for After rising from 1996 to 2002, the estimates de- Sea was the NPD’s mapping and inclusion of Barents
ween 2 330 (P95) and 6 200 (P05) million scm oe (fact exploration and oil and gas production over several clined up to 2017. The discovery of Ormen Lange in Sea South-East. This area was incorporated in the
box 3.1 and figure 3.1). The expected value is 4 000 decades to come. 1997 raised great expectations for a number of large Norwegian sector after the boundary treaty with Rus-
million scm oe, up by 37 per cent from 2 920 million More than 60 per cent of undiscovered resources are structures in the deepwater areas of the Norwegian sia came into force in 2011. In the same year, the sea
in 2015. This big increase primarily reflects the new expected to lie in the Barents Sea, with the remainder Sea. However, disappointing wildcats prompted a areas around Jan Mayen were included in the estimate
estimate for Barents Sea North in 2017. divided more or less equally between the North and downgrading of the estimates in 2003. That related for the Norwegian Sea. That increased the total esti-
Norwegian Seas (figure 3.3). particularly to the gas potential in the deepwater mate for undiscovered resources.
areas. Before 2017, the resource estimate for the Bar-
7000
While the estimate for the Barents Sea increased in ents Sea primarily covered undiscovered resources
Total recoverable undiscovered
6000 2010, those for the North and Norwegian Seas were in Barents Sea South – including those in plays which
resources (million scm oe)
3000
5000 reduced. These reductions primarily reflected lower extend into Barents Sea North. The NPD’s mapping of
Total recoverable undiscovered
2500 the latter area in 2016-17 led to the eastern part being
resources (million scm oe)
4000 4000
P95 2330 separated out with its own estimate. See the NPD re-
3000 2000 port on Geological assessment of petroleum resources
2000 Gas Liquid Total in eastern parts of Barents Sea North 2017. This area
Expected value 4000 1500
1370 accounts for about 35 per cent of the undiscovered re-
1000 1165 North Sea
13% North Sea North Sea
1000 Barents Sea 18%
P05 6200 22% Barents Sea
0 725 740 North Barents Sea
29% Norwegian North North
Norwegian
P95
P05
500 Sea 39% Norwegian 34%
21% Sea
Sea 19%
16%
0 Barents Sea South Barents Sea Barents Sea South
North Sea Norwegian Sea Barents Sea Barents Sea 37% South 29%
South North 23%
Figure 3.1 Estimated undiscovered resources – expected Figure 3.2 Undiscovered resources by area within the Figure 3.3 Distribution of undiscovered resources in each
value and uncertainty range. spread from P95 to P05. The numbers shown are the area: gas, liquids and total.
expected values.
26 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 R E S O U R C E R E P O R T E X PLO R AT I O N 2018 27You can also read
