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High Prices Benefit Iran Despite Lost Oil Exports

High Prices Benefit Iran Despite Lost Oil Exports

Iranian Vice President Eshaq Jahagiri…

Oil Firms To Boost Drilling In Norway’s Mature Offshore Areas In 2018

Aker drilling

Following a discouraging 2017 Arctic exploration campaign, oil companies plan to nearly double exploration drilling offshore Norway with a focus on more mature areas of the Norwegian Continental Shelf (NCS), according to preliminary company drilling plans.

Up to 50 exploration wells, including such to delineate previously made discoveries, could be drilled offshore Norway in 2018, up from 26 wells drilled in 2017, according to data and estimates compiled by Reuters.

This year, oil companies focused on frontier exploration drilling in the Barents Sea, neglecting the powerhouse of the Norwegian oil industry, the North Sea. Exploration activity in the North Sea—the most mature area of Western Europe’s biggest oil producer—is at an 11-year low this year, which is a concern for the industry’s regulator, the Norwegian Petroleum Directorate (NPD).

This year’s Barents Sea drilling campaign was a disappointment for all operators, but they are not giving up—instead, they are vowing to return with more drilling next year.

But the poor 2017 Arctic exploration results did not stoke much interest in the latest licensing round offshore Norway that will be awarding licenses in less explored areas. Just 11 companies applied for acreage in the Barents and Norwegian Sea in the latest round, compared to 26 companies that had applied in the previous round.

“The applicant landscape could indicate that some parties are prioritising exploration in mature areas this time around,” the NPD said.

“We do not rule out that the number of NCS exploration and appraisal wells may increase by 70-100 percent year-on-year in 2018,” analyst Teodor Sveen-Nilsen at Sparebank 1 Markets, told Reuters.

Related: U.S. Slaps Sanctions On Israeli Oil Billionaire

“We are seeing appetite to global exploration returning, and Norway is a big part of that,” Neivan Boroujerdi, a senior analyst at Wood Mackenzie, told Reuters, expecting the higher exploration activity to be driven by exploration in the North Sea and the Norwegian Sea.

Norway’s oil supermajor Statoil, for example, will center its oil drilling efforts on its own backyard next year. But unlike in 2017, next year’s exploration focus doesn’t involve looking for potential gigantic resources in frontier areas.

Instead, Norway’s oil major is planning a drilling campaign that will explore areas close to existing infrastructure in order to maximize the value and potentially tie up even smaller discoveries to existing platforms.

By Tsvetana Paraskova for Oilprice.com

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