The oil industry continued to contribute significantly to Norway’s good economy in 2011. Last year’s investment and activity level was high, and it will remain at a high level in the next five years.
Twenty-two new oil and gas discoveries were made in 2011. Sixteen of these were made in the North Sea, three in the Norwegian Sea and three in the Barents Sea. In total, 54 exploration wells were terminated in 2011. This is an increase from 2010, when 41 exploration wells were terminated.
In the North Sea, the 16/2-6 "Aldous/Avaldsnes" discovery was confirmed to be among the five largest oil discoveries on the Norwegian shelf of all time. The Norwegian Petroleum Directorate's preliminary estimates of the discovery are about 1800 million barrels of oil equivalents. However, the Norwegian Petroleum Directorate emphasises that this figure is uncertain, and six or seven new appraisal wells are planned during 2012.
In the Barents Sea, the 7220/8-1 "Skrugard" and 7225/3-1 "Norvarg" discoveries were proven. Together with the recently proven discovery 7220/7-1 "Havis", this has led to new optimism and interest in the area. The new discoveries confirm the Norwegian Petroleum Directorate's view that there is still a great potential for discoveries on the Norwegian continental shelf, both in mature and frontier areas.
The investments in the petroleum industry are poised to increase by 40 per cent from 2010 to 2012, including exploration costs. In 2011, just under NOK 150 billion was invested. This number is expected to increase to NOK 170 billion this year, with a moderate growth towards 2016. Several planned field developments and new developments on older fields are the most important reasons for the significant growth.
In the previous year, ConocoPhillips submitted plans for development and operation (PDOs) for Ekofisk Sør and Eldfisk II, which will contribute to 40 new years of recovery from the area. According to plan, about NOK 65 billion will be invested in the developments, which includes e.g. production facilities resting on the seabed. Such facilities are also being considered by Lundin and Det norske oljeselskap for 16/1-8 "Luno" and 16/1-9 "Draupne", respectively, on the Utsira High in the North Sea. The authorities and operating companies have seen that a coordinated development solution here could increase the value creation from the fields.
Total will soon submit a PDO for 30/7-6 "Hild", an oil and gas discovery proven in 1978. According to the plan, the field will be developed with an independent production facility resting on the seabed.
The overall production of oil and gas was marginally lower in 2011 than the year before. Due to market conditions, somewhat less gas was sold than expected.
After the demarcation line in the Barents Sea was stipulated on 7 July 2011, the Norwegian Petroleum Directorate started mapping the new area with the goal of opening it for new petroleum activity. This work will be completed in 2012.