Wednesday 6 September 2017

Norway has received a record number of bids for exploration acreage in established areas being offered in the country’s latest Awards in Pre-defined Areas (APA) round.

The Petroleum & Energy Ministry had received applications from 39 companies by a 1 September bid deadline - the highest tally since the licensing exercise was launched in 2003 and higher than the previous record of 50 in 2013 before an oil price drop that hit exploration.

It is also up on the 33 companies that applied for APA acreage last year when 56 blocks were awarded to 29 players, indicating a recovery in exploration interest.

Among players vying for acreage are DNO, which is re-entering the Norway fray after a 10-year absence, and newcomers M Vest Energy and Wellesley Petroleum.

Ambitious independents Faroe Petroleum, Okea, VNG and private equity-backed Point Resources are also on the list of bidders, as well as well-established players Statoil, OMV and Wintershall.

This year’s round has been expanded significantly with the addition of 87 blocks, comprising 53 in the prospective Barents Sea and 34 in the Norwegian Sea.

It marks the largest-ever APA expansion in the Barents where acreage is being offered around the Wisting Central and Alta-Gohta discoveries made by OMV and Lundin Petroleum, respectively.

“The record high interest confirms that the oil companies see opportunities on the Norwegian continental shelf,” Petroleum & Energy Minister Terje Soviknes said.

He added “this shows that the government's petroleum policy has the desired effect”, having rebuffed hydrocarbon doubters in the country’s green lobby that are pushing their agenda to halt oil exploitation in upcoming general elections next week.

The Green Party and other parties including the Socialist Left that are seeking to wind down the country’s key oil industry in favour of renewables could emerge as kingmakers in a power-sharing deal, given the ruling Conservatives and opposition Labour Party are locked in a close race that could see neither gaining a parliamentary majority.

Soviknes this week criticised green lobbyists as “naive” and “dreamers” for failing to understand the importance of vital value creation generated by the oil and gas industry for the national economy, according to Dagens Naeringsliv.

“Further exploration activity is vital to future value creation and employment on the Norwegian continental shelf. This in turn is important with reference to financing the welfare state,” the minister said.

Soviknes is a member of the Progress Party that presently holds power jointly with the Conservatives.

Production licences are set to be awarded in early 2018 under the latest APA round.