Offers given in APA 2019Expronews gives you insight into APA 2019

Offers given in APA 2019

The annual APA licensing round has come to an end. Today, the minister of petrolum and energy presented her offer and work obligations.

[UPDATED with comments from the Seismic industry]

The new petroleum and energy minister of Norway, Sylvi Listhaug, announced today the results of the evaluation of the applications from 33 companies in APA 2019, at the NPF Oljeindustripolitisk seminar (in Norwegian) 2020 in Sandefjord. Of these 33 appliers, 28 were awarded licenses, 19 operatorships, altogether 69 licenses were awarded, 14 less than last APA.

Since the application deadline, DEA Norge and Wintershall is one company and listed on Wintershall DEA. But, Lukoil, M Vest, Petrolia and RN Nordic were not awarded any licenses this time.

Of the majors, Aker BP was offered 15 new licenses, 9 as an operator. AS Norske Shell was offered 5 new licenses, 2 as an operator, the same as OKEA and Suncor. Chryasor was offered 8 new licenses, 3as an operator. ConocoPhillips was offered 5 new licenses, 3 as an operator. DNO was offered 10 new licenses, 2 as an operator. Equinor was offered 23 new licenses, 14 as an operator. Lundin was offered 12 new licenses, 7 as an operator. Total was offered 2 new licenses, 1 as an operator. Vår energi was offered 17 new licenses, 7 as an operator. Wellesley was offered 7 new licenses, 3 as an operator. Wintershall DEA was offered 9 new licenses, 3 as an operator.

Figure: Historical overview 2010 – 2019 with the number of companies that applied in APA 2019, companies awarded, number of licenses, and finally operatorship awarded.

As usual, the North Sea stands out with most awarded licenses, then the Norwegian Sea and finally the Barents Sea. The Barents Sea saw a 75 % increase in awarded licenses in APA 2018. The result of the 2018 awarded licenses has not manifested in discoveries, yet.

Figure: Historical overview of no. of licenses in the three sub-areas of the Norwegian Continental Shelf. An increase in licenses awarded in the Barents Sea area the last two years stand out.

The work obligation program is also good news for the providers of geophysical data to the Norwegian exploration companies. Both 2D and 3D seismic data and Electromagnetic data (EM) can be a part of the work obligation given to the APA applicants. The geophysical companies know that the Oil and gas exploration companies await this award before they order any geophysical data, and the geophysical companies know more about the work potential on the NCS for the upcoming season.

Four firm wildcat wells are given, two in the North Sea and two in the Norwegian Sea, none in the Barents Sea.

[updated] New 3D acquisition is required over 5 three licenses. One license is given the option to gather new 3D seismic in the first step of the work obligation. One license is given the option to acquire new 3D seismic data in step 1 or/and 2 of the work obligation, two licenses are to gather 3D seismic after an initial 2-year G&G period. Only 1 of the firm 3D seismic is specified in volume, i.e. 3000 km2(!) in the SE Barents Sea, while the majority of the licenses are to purchase and/or re-process 3D or 2D seismic data as a part of their work obligation.

The large potential for the seismic companies is the sale of existing 3D Multi-Client seismic data and 3D reprocessing or sale of existing seismic data. Other geophysics: One new acquirement of EM data and two four EM feasibility studies are given in the work obligations. The given work program can be found here.

No new acquisition of 2D seismic is given, the last APA rounds at least 1 or 2 2D seismic acquisitions were given as part of the work obligations.

Bengt Larssen, Sales Manager for Europe at Shearwater Geoservices, commented this afternoon to on the awards in the APA 2019 seen from the Seismic industry side.

– We are always excited about the result of the APA licensing rounds. It is interesting to see that the authorities are proposing new technology in mature areas on the NCS as part of the license work obligations. For the industry, this is a chance of new possibilities, and to incorporate new technologies. Also positive is the amount of reprocessing programs.

– Several of the licenses acreages are small and do not necessarily generate much work, Larssen continues.

Shearwater has geared up its fleet size considerably the last year, Larssen can’t comment on the companies plans for expansion, but more seismic work has to be followed up on the processing side.

One example of the APA licensees giving results is today’s announcement of the 25/7-8 S ‘Enniberg‘ discovery by ConocoPhillips, operator of PL 917, awarded in APA 2017. The major example of the impact of APAs was the Lundin operated 16/2-6 ‘Avaldsnes‘ in PL 501, which later turned out as the giant Johan Sverdrup field.

The Fact map and Fact pages at NPD will not update with the new production license data before the companies have signed and approved the acreage and work obligation offers from the authorities. The map of the offers acreage can be found here.

From the venue of the by-invitation-only NPF conference in Sandefjord, the minister states that: “Hopefully, the exploration in the awarded acreage will result in new discoveries. This is important to ensure employment, value-creation and future government revenue for Norway’s largest industry”.