Another sign that frontier exploration is getting less and less important even in the Norwegian sector? One would say so, when looking at the awards announced by the NPD yesterday.
Where in 2019 12 new production licences were awarded to 11 different companies, yesterday the NPD announced that only 4 production licences were awarded to a total number of 7 companies. This suggests a diminishing appetite for frontier exploration, which is typically the type of exploration that is needed to replace volumes through high-risk high-reward drilling.
Whilst infrastructure-led exploration is continuing steadily, with good results reported recently for instance by Equinor north of Troll and this week by Vår Energi in the Balder area, it does not result in the volumes needed to guarantee longer term stable production.
Also, looking at the sizes of the awarded blocks, there is a limited areal coverage by the four awarded licences, with the largest one – operated by Equinor and partnered by Lundin (30%) and Petoro (20%) located near the Intrepid Eagle gas discovery made in 2018.