Offshore staff
STAVANGER, Norway – Wood Mackenzie says Norway has 10 Bboe of discovered natural resources that have yet to be developed. It believes more than 60% could be commercialized, potentially adding $106 billion to the country’s oil and gas industry revenues.
The resources are spread across 206 discoveries, ranging in size from less than 1 MMboe to the 2.4-BboeJohan Sverdrup field. Half are in the North Sea with the remainder divided between the Norwegian Sea and the Barents Sea.
James Webb, Northwest Europe upstream analyst, said: “We consider 4.8 Bboe likely to be economic, with 1.6 Bboe potentially economic, and the remaining 3.6 Bboe not commercial…”
However, the industry will need to address certain issues to maximize value from these projects, he cautions. “Low reserves, lack of infrastructure, and/or complex geology are just some examples of the technical obstacles faced.
“Commercially, the global upstream industry faces an extremely difficult economic environment. Investors are increasingly demanding bigger dividends and a better rate of return. As a result many companies have committed to stricter capital discipline and are intensely screening projects based on financial criteria. Capital intensive projects are particularly being scrutinized. This means more difficult projects could be delayed, and in some circumstances will simply remain undeveloped.”
He added: “Over the last five years the average size of new [Norwegian] discoveries has been greater than the average undeveloped field and therefore new fields have been prioritized. In keeping with the capital discipline theme, complex developments such ashigh-pressure/high-temperature (HP/HT) are also being delayed in favor of more straightforward projects.”
It is in the interests of certain companies such as Lundin Petroleum, Det Norske oljeselskap, and Faroe Petroleum to drive development forward as these fields dominate their portfolios. “However we see increased cooperation between the companies, state DFI, and Norwegian government as vital in order to achieve the $106-billion prize,” Webb suggested.
09/03/2014
