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Ministry prods oil activity up north

When Norway’s government ministry in charge of oil and energy launched its latest annual licensing round for offshore oil and gas operations last week, the trend was clear: Arctic areas are in focus, and the state wants to speed up the pace of exploration and production.

Oil Minister Ola Borten Moe noted how existing infrastructure can lead to a "win-win situation" on mature fields like Snow White, which is linked to this facility at Melkøya. PHOTO: Statoil / Helge Hansen

“This is a continuation and a confirmation of an earlier trend,” said Oil and Energy Minister Ola Borten Moe. “We’ve moving north.”

His ministry expanded the so-called “pre-defined areas” of “mature” portions of the Norwegian Continental Shelf with the aim of awarding new production licenses for them early next year. Moe called “awards in pre-defined areas (APA)” an “important tool” in managing Norway’s petroleum resources because they’re a “key instrument in our strategy for the mature areas.”

Moe, known for being bullish on more oil exploration, noted that small discoveries can be tied to existing infrastructure and that there may be potential for new independent development. “The result is extended lifetimes for existing infrastructure and production from new discoveries,” Moe said. “In other words, a ‘win-win situation.'”

Of the 48 blocks or parts of blocks making up the expanded “pre-defined area,” only two are in the North Sea. The rest are in the Norwegian Sea (13) and the Barents Sea (33), much farther to the north. Moe stressed the possibility of more exploration around the Goliath and Snow White fields, for example.

All told, the government wants to make 134 new blocks available for oil companies keen on searching for more oil and gas off Norway. They’re all subject to the results of upcoming public hearings, though, where the environmental movement is expected to object. Moe has repeatedly irritated environmentalists since being named oil minister last year, but now seems to have taken on a more diplomatic tone.

“The environmental movement has all opportunity to come with suggestions and comments during the round of hearings,” Moe told newspaper Dagens Næringsliv (DN).

There’s no question that oil companies are highly interested in the new round of possible concessions for the 48 mature blocks and 86 new areas, given the popularity of the last round of licensing. “We’re seeing very strong interest from all kinds of companies, both big and small,” Moe told DN. Interest is especially strong, he said, in areas where there already have been discoveries, such as Skrugard and Havis.

Companies on the list of those interested include Lukoil of Russia, Chevron of the US, Total of France, Wintershall of Germany and Repsol of Spain, in addition to Norway’s own Statoil. The interest, according to Moe, boosts the probability of more new oil and gas discoveries. Applications for concessions will be due at noon on September 6.

Views and News from Norway/Nina Berglund

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