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Norway receives more bidders for mature areas oil licensing round

Rigzone/6 September 2017

OSLO, Sept 6 (Reuters) – Norway’s licensing round to explore for oil and gas in mature offshore areas attracted bids from 39 companies, up from 33 firms last year, the Oil and Energy Ministry said on Wednesday.

The announcement comes five days before a parliamentary election in Norway, where some opposition parties have called for scaling back exploration to reduce carbon emissions from Western Europe’s top oil and gas producer.

When the so-called predefined areas (APA) licensing round was announced in May, the right-wing government expanded the areas offered near existing discoveries by 87 blocks in the Norwegian and the Barents Seas.

Norway’s Oil and Energy Minister Terje Soeviknes said in a statement that increased interest in this year’s APA round showed optimism was returning to the industry.

“Further exploration activity is vital to future value creation and employment,” he said. “This in turn is important with reference to financing the welfare state.”

Applicants included majors Shell, ConocoPhillips , Exxon Mobil and Total, as well as Norway’s biggest oil and gas company Statoil.

Also on the list was Oslo-listed DNO, the biggest oil producer in the Kurdistan region of Iraq, which re-entered the Norwegian continental shelf in May after acquiring Origo Exploration.

The government plans to award licences in early 2018.

In the APA round in 2016, 29 of the 33 applicants were awarded 56 production licenses.

Mature area licensing rounds attracted the most interest in 2013, when 50 firms submitted bids, compared to 16 bids in 2005.

Norway’s APA rounds were introduced in 2003 to encourage exploration near existing discoveries. Oil firms usually have between one and three years to decide whether to drill an exploration well, otherwise the production licence becomes void.

Norway holds separate licensing rounds to hand out acreage in frontier areas.

Companies do not pay for exploration acreage, but future profits from any discoveries are subject to high tax rates.


News Source: Rigzone