Norway's oil industry is putting more money into exploration than expected, the country's industry regulator told Reuters. What's more, investments are seen to continue rising next year and in 2020, the chief of the Norwegian Petroleum Directorate, Bente Nyland said.
This year, state major Equinor and other oil companies plan to drill 45 exploration and appraisal wells, versus an expected number of 35 and up from 34 drilled last year.
In early May, the Norwegian statistics authority SSB released the results of a survey that revealed oil companies plan higher spending on new exploration but lower investments in mature fields. For 2019, the Norwegian oil industry planned to spend US$4.01 billion (33.3 billion kroner) on new exploration activities, up from US$3.07 billion (25.5 billion kroner)
Earlier this month, Norway announced the latest oil licensing round in mature areas on the Norwegian Continental Shelf, expanding this year's predefined area by 103 blocks in the Norwegian Sea and the Barents Sea. Companies have until September 4, 2018, to bid, and the government aims to award the new production licenses in early 2019, the Norwegian Ministry of Petroleum said in a statement.
New discoveries and their development are vital for Norway's oil industry, which has seen a stable decline in production in recent years, not just because of lower oil prices but also because of a lack of many new discoveries.
Still, there are a couple of fields that should help the country sustain its production until about 2023. Johan Sverdrup, which is estimated to hold between 2.1 billion and 3.1 billion barrels of oil equivalent, is the biggest recent discovery in Norway, and is scheduled to start production in 2019. Johan Castberg, albeit smaller, will also contribute to the maintenance of production, with proven reserves of some 400-600 million barrels. Production there should start in 2022.
By Irina Slav for Oilprice.com
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