Lloyds List: Bids mount as Norwegian focus moves northwards in 19th round: Blocks in frontier areas of Barents Sea and Norwegian Sea attract 24 companies including four new entrants, writes Martyn Wingrove: “US oil majors, including Amerada Hess, Chevron, ConocoPhillips and Marathon, participated in the round, but absent were ExxonMobil and London-based BP. Shell was therefore the largest oil company to enter bids as the Anglo-Dutch firm raised its focus on exploring for big cat oil and gas fields.”: Tuesday November 22, 2005
INTEREST in Norway's frontier exploration areas is hotting up with 24 companies submitting bids for blocks in the 19th licensing round.
The new Minister of Petroleum and Energy Odd Roger Enoksen has received a higher volume of bids for exploration acreage as the round's focus shifted northwards to include blocks in the Barents Sea.
Norwegian oil majors Statoil and Norsk Hydro were the main players in the round, both submitting large bid packages for blocks.
There were also bids from smaller Norwegian companies, international oil majors and some select independents, as well as bids from four new entrants to the Norwegian sector.
The number of companies participating has risen from 13 in the 17th round and 18 in last year's round to the 24 involved last week.
'The applications show that exploration acreage on the Norwegian continental shelf is very competitive and it is clear competition is increasing also in frontier parts of the shelf,' said Mr Enoksen.
'These applications will lay a good foundation for comprehensive exploration of the frontier areas.'
In all, there were 34 blocks in the Barents Sea and 30 in the Norwegian Sea on offer in the 19th round, which closed last week. Blocks are likely to be awarded by the end of March next year.
'The government is focusing on development in the northern areas so it is encouraging to see that the industry appreciates the continuing exploration in the Barents Sea,' said Mr Enoksen.
'This round also shows that the Norwegian Sea attracts a large number of applicants, in spite of the fact that there have been several rounds lately.'
Statoil put in an aggressive bid to raise its exploration efforts in the frontier areas, but sees this as a high- risk strategy.
'The NCS will be an important area of commitment for us over many years to come, but that depends on securing new exploration assignments,' said Tim Dodson, Statoil's head of exploration in Norway.
'Although a large number of blocks are on offer, the acreage involved still presents a high level of risk.'
Norsk Hydro also submitted offers on several blocks in both frontier areas. It has been the most successful explorer this year with a string of discoveries in the Norwegian and North Seas.
'It is positive that the new government has decided to stick to the original schedule for the 19th round,' said Hydro's head of development in Norway Lars Christian Alsvik.
'We envisage many interesting exploration opportunities in the acreage included in the round. We want to play our part in realising the opportunities for value creation in the new areas to be awarded.'
Explorers in the Barents Sea are hoping to find enough large oil fields to allow an expansion of the infrastructure in the Arctic portion of Norway.
The only development involving gas fields is the Snohvit project, where Statoil has built a liquefied natural gas plant near Hammerfest to begin processing gas from three fields in 2008.
US oil majors, including Amerada Hess, Chevron, ConocoPhillips and Marathon, participated in the round, but absent were ExxonMobil and London-based BP.
Shell was therefore the largest oil company to enter bids as the Anglo-Dutch firm raised its focus on exploring for big cat oil and gas fields.
Other large European companies involved included BG, Eni and Total, while smaller players included Dong, Gaz de France, Lundin, RWE-Dea, Svenska and Wintershall.
New entrants in the round were Norway's Discover Petroleum and Noreco, plus London-listed Faroe Petroleum and Premier Oil.
Other bidders included Norway's Det Norske Oijeselskap, Revus Energy and Canadian independent Talisman Energy.
The tight global rig market has reduced exploration activities on the Norwegian continental shelf to only a few wells, but most of these have resulted in discoveries, except the wildcat wells drilling in the Barents Sea.
Few in the industry expect more harsh environment rigs, that are required to work in Norway, to become available over the next two to three years, so Statoil and Norsk Hydro, in collaboration with Eni and Shell, have chartered rigs for long-term use.
The rig capacity secured takes into account the current drilling plans and commitments in the 19th round for all these companies.
Ststoil'Chevron in drilling accord
STATOIL and Chevron have joined forces to explore for oil and gas fields in the Barents Sea, which included joint applications in the 19th round.
This co-operation agreement brings together Chevron's seismic technology and global exploration experience with Statoil's local knowledge and experience operating in the sea.
Statoil's work on the Snohvit project is another attraction for Chevron, which is boosting its presence in Norway.
Both companies also have complementary liquefied natural gas technologies.
'Statoil has proven capabilities in Arctic waters. This agreement is an opportunity to position Chevron for growth in the region,' said Gary Luquette, president and managing direct of Chevron Upstream Europe.
The first action under this agreement was joint applications for exploration acreage in the 19th licensing round. There is a commitment to work together to apply for blocks in future rounds.
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