“Now we need to be awarded licenses, but we are optimistic!” says Arnt-Eirik Rørnes, Exploration Manager in RN Nordic Oil.
RN Nordic Oil is Rosneft’s subsidiary in Norway and has been active on the NCS since 2012. It has participated in only 1 license and well as a partner (small gas discovery Pingvin in the Barents Sea). As of today the company stands without licenses. They have applied in APA2018 licensing round and are hopeful to receive some awards as opposed to the 23rd and 24th licensing rounds.
“We believe we know why RN Nordic was not awarded any licenses in these rounds and in APA 2018 these issues are resolved” according to CEO Halfdan Millang.
When measured in production and reserves, Rosneft is the world’s biggest oil company listed on the stock exchange. In 2017 Rosneft produced on average 5,7 million of barrels a day. For comparison: the NCS produces almost 2 million barrels a day and the worldwide production is ca 90 million barrels a day. The company’s reserves are estimated to be 142 billion boe, which is more than Norway’s total reserves of ca 20 billion boe.
Rosneft has a very strong position on the arctic shelf north of Russia, in the Barents, Pechora, Kara, Lapte, East Siberian and Chukchi Sea. Their unique knowledge about the geology and petroleum potential in the Barents Sea is of course of interest for the Norwegian authorities and oil industry. The resources on the artic shelf can be enormous with yet-to-find volumes of up to 232 billion boe and relatively few wells.
Applied for operatorship
“Our strategy is to grow organically, and the focus areas are the Barents Sea and the Norwegian Sea” says Rørnes. The G&G team (of 8) has been screening the focus areas and RN Nordic has applied in the APA2018 license round. Farming in into exploration licenses, discoveries or fields is not totally out of question.
“With Rosneft’s support, RN Nordic Oil is competent to participate in most wells, also HPHT and in deep-water so we are ready to start our business on the NCS.” Adds Millang.
RN Nordic Oil has applied to be prequalified as operator in 2018 and they expect to get approval in 2019. Then of course, the company will have to increase their staff. They plan to keep support roles mostly external.
The need for a pipeline
“There is still potential for many and large discoveries in the Barents Sea. The challenge is the lack of infrastructure. The Barents Sea needs a big field, larger than Snøhvit (1,7 billion boe of gas, NGL and condensate) to be able get infrastructure in place. Alternatively, several smaller discoveries could be developed together.” says Rørnes.
“Without a pipeline to the continent, there won’t be enough resources developed. Europe needs the gas and at some point in the future, the pipeline off the mid-Norway coast will go empty. Much is at stake.” According to Rørnes.