Norwegian Continental Shelf Disappoints

Published at 06:41PM - 14/06/16

2015 has been a substandard year for the Norwegian Continental Shelf (NCS), a report by Rystad Energy says.

According to “Recent Exploration Performance on the NCS”, exploration in the region has seen poor results over the course of last year, and 2016 does not look very promising.

“2015 turned out to be a very disappointing year. Despite the number of wildcat wellbores being only 11% down compared to the peak in 2013, total discovered volumes amounted to only 230 million boe”, the report reads.

Norwegian Continental Shelf Disappoints

Statoil-operated Julius, in the Central Graben, proved to be the biggest discovery of the year.

“Exploration at the NCS was successfully revived with the introduction of APA rounds and cashback in 2003 and 2005, respectively. However, following several prosperous years between 2010-2012, discovered resources on the NCS have been only moderate,” the report reads.

The report adds that 2012 and 2013 have witnessed an increase in the number of wildcats drilled, but the total volume of discoveries has suffered a decline, and discovered resources in 2014 were only slightly above the 2013 levels.

In 2016, so far, 13 wildcats have been drilled as of the end of May, but only around 20 mmboe have been discovered.

“Enormous Value Yet to Be Realised”

However, recent value creation has been significant, partly realised through transactions involving discoveries.

“Once we see an upturn in the oil and gas markets, transaction values are, however, likely to again enable profit generation through exploration and farm-outs on the NCS”, the report adds.

Plus, Rystad sees “enormous value yet to be realised on the NCS”, with estimates of around 15-20 billion barrels of oil equivalent yet to be found. Overall, the agency expects that, “yearly exploration results over the next 20 years could be similar to what we have seen in the last 15 years, roughly 600 million boe per year”.

According to the report, the Barents Sea will be the main exploration province, but exploration will continue in the Norwegian Sea and the North Sea.

Last updated on 10:40AM - 15/06/16