Guide
Reading the Norwegian shelf: fields, discoveries, licences and operators
The concepts you need to read the figures from the Norwegian Offshore Directorate: who owns what, how acreage is awarded, what separates a discovery from a field, and why reserves are not the same as resources.
The state owns the resources, companies get a licence
The Petroleum Act establishes that the state owns the oil and gas deposits on the Norwegian continental shelf. Companies get the right to explore and produce through a production licence (Norwegian utvinningstillatelse, often abbreviated PL). The licence grants exclusive rights to surveys, exploration drilling and production within a defined area, and every licence has a number.
A licence is usually held by several companies together, called licensees. Their shares are given in per cent. The ministry appoints one of them as operator, the company that runs the work in practice: drilling, development and operations. The licensees pay the costs and own the production in proportion to their shares, and each has a duty to oversee the operator.
When a deposit extends across several licences, the licensees agree on a coordination (unitisation) and the deposit gets its own ownership shares. That is why the shares in a field can differ from the shares in the licences around it. The field pages show the current shares as listed by the Norwegian Offshore Directorate, and the company pages add them up per company.
Licensing rounds: APA and numbered rounds
Acreage is awarded in two equal types of licensing round:
- APA (awards in predefined areas; Norwegian TFO) covers mature areas with known geology and infrastructure. All open acreage in the predefined area is announced every year, without nominations. The scheme was introduced in 2003, and the area can be extended but not reduced.
- Numbered licensing rounds cover frontier areas with less geological knowledge and little infrastructure. Companies nominate blocks they want announced, and exploration happens step by step so that large areas can be mapped with few wells. The rounds have been held since 1965, usually every other year.
The first period of a licence is reserved for exploration and can last up to ten years. The licensees have a work commitment, for example seismic or a well, with deadlines. Once it is fulfilled they can relinquish the licence, and the acreage can later be awarded again.
On the globe on the analysis page you can switch on the production licences layer and see where the licences and the APA area are.
Blocks and well names
The map of the shelf is divided into quadrants, and each quadrant into blocks. A well is named after the block it is drilled in plus a sequence number: 34/10-1 is well number 1 in block 10 of quadrant 34. When you see a name like that in the news, you know roughly where on the shelf the well was drilled.
- Exploration wells is the umbrella term for wildcat wells and appraisal wells.
- A wildcat well is drilled to find out whether a new structure contains petroleum.
- An appraisal well is drilled after a discovery to find out how large it is and how far it extends.
- Development wells are drilled on a field to produce, or to inject water or gas back into the reservoir.
- A dry well has not proven mobile petroleum.
New exploration wells and discoveries are listed under New wells and discoveries on the analysis page, and the wells can be shown as a layer on the globe.
From discovery to field
According to the Norwegian Offshore Directorate, a discovery is one or more petroleum deposits proven in the same wellbore, where testing, sampling or logging has shown mobile petroleum to be probable. The definition covers both commercial and non-commercial discoveries.
A discovery becomes a field, or part of an existing field, when the authorities have approved a plan for development and operation (PDO) or granted an exemption. The PDO includes an impact assessment that is sent out for consultation, and large projects go to the Storting (parliament) before approval. Pipelines and onshore plants need their own plan for installation and operation (PIO).
Most of the discoveries being considered for development today are small and are developed as satellites tied back to fields that are already producing. That way the existing infrastructure is used instead of a new platform.
The OESA field pages show three statuses from the directorate: approved for production (the PDO is approved but production has not started), producing and shut down.
Resource classes: reserves are not the same as resources
The Norwegian Offshore Directorate only classifies quantities that can be recovered. All such quantities are called resources, and reserves are a particular group of them. The classes follow how mature a project is:
| Class | What it is |
|---|---|
| Historical production | What has been produced, sold and delivered. |
| Reserves (classes 1–3) | Quantities that have been decided for production. |
| Contingent resources (classes 4–7) | Discovered but not yet decided for production. Also covers possible measures to increase recovery on the fields and resources where recovery is unlikely. |
| Undiscovered resources (classes 8–9) | Oil and gas assumed to exist but not yet proven by drilling. |
The letters F and A separate the development of discoveries and deposits (F, first) from measures to increase recovery from a deposit (A, additional). So when a field page shows remaining reserves, that is what is left of the quantities decided for production, not everything in the subsurface.
The units
- Sm³ (standard cubic metre) is volume measured at standard pressure and temperature so figures from different fields can be compared.
- Oil equivalents (o.e.) let oil, gas, NGL and condensate be added up. 1,000 Sm³ of gas counts as 1 Sm³ o.e., so billions of Sm³ of gas equal millions of Sm³ o.e.
- 1 Sm³ of oil is about 6.29 barrels. The same factor is used on the field and analysis pages when production is converted to barrels per day.
- The size of fields and discoveries is usually given in million Sm³ o.e., gas alone often in billion Sm³.
Where to find the figures
- FactPages from the Norwegian Offshore Directorate has tables of fields, discoveries, wellbores, production licences, companies and production. The data is open under the Norwegian Licence for Open Government Data (NLOD).
- FactMaps shows the same on a map.
- norskpetroleum.no, run by the Ministry of Energy and the directorate, explains the regulations, the tax system and the resource accounts.
- At OESA: all the fields with production, shares and reserves, the companies on the analysis page, and the globe with layers for fields, facilities, pipelines, wells and licences on the analysis page.
Sources
- The Petroleum Act and the licensing system – norskpetroleum.no
- Exploration policy (APA and numbered rounds) – norskpetroleum.no
- Resource classification – norskpetroleum.no
- Discoveries – norskpetroleum.no
- FactPages – Norwegian Offshore Directorate
- FactMaps – Norwegian Offshore Directorate
- Norwegian Licence for Open Government Data (NLOD)
The guides are written by OESA students to explain concepts and how things fit together. They are not investment advice. Figures that are not definitions carry a source and a date; if you find an error, let us know at styret@oesa.no.