It is pivotal to have access to acreage in order to discover oil and gas. As of 31 December 2013, Det norske holds interests in 80 licenses on the Norwegian Continental Shelf (NCS), of which we operate 33.
et norske remains one of the most ambitious oil companies on the Norwegian Continental Shelf. Det norske participated in a total of 14 wells in 2013, in one of them as operator. Total investments in exploration activities amounted to approximately NOK 1.7 billion. About two thirds of the company’s exploration funds are invested in mature areas of the North Sea, where the infrastructure is good and the discovery rate is still high. The remaining resources are invested in less explored areas of the North Sea, primarily the Barents Sea.
The appraisal program in central parts of the Johan Sverdrup field is completed in the course of 2013. In 2013, five wells were completed. In The North Sea Det norske participated in two discoveries, at Askja West and Askja East. The discovery at the Trell prospect where concluded early 2014.
One of the most exciting discoveries in 2013 was made in the Gohta project, in licence 492 in the Barents Sea. This was the first successful discovery in Permian limestone on the Norwegian shelf and opens up new possibilities for exploration in the area.
Licensed to explore
Licensing rounds are very important for Det norske, and the best way of gaining access to new acreage. Since 1965, the authorities have carried out 23 licensing rounds. These are awards of acreage in “new” areas that have not yet been sufficiently explored. The licensing rounds are announced every other year and consist of a nomination phase, a hearing phase and the announcement. The application area has remained unaltered for the last 15 years.
In addition, the Norwegian authorities introduced the Awards in Predefined Areas (APA) rounds in 2003. These licensing rounds comprise new calls for applications in mature areas of the Norwegian shelf. The APA rounds are usually conducted on an annual basis.
During the 2013, Det norske was awarded ten new licences in the licencing rounds, and bought into nine. The company relinquished or sold a total of seven licences. In three licences, Det norske went from being a partner to taking over as operator.
More on licenses
The production licenses are awarded to a commonality of interest, in which normally consists of several companies. The production license regulates each company’s rights and obligations towards the State. All partners in a license are jointly and severally responsible in fulfilling whatever obligations the production license assumes. Initially, the license is valid for a period of up to ten years. During this period, a pre-established work program will be completed in the form of geological and geophysical pre-studies and/or exploration drilling, plus environmental surveys in vulnerable areas.
When a production license has been awarded, the licensees must enter into a joint cooperation and accounting agreement, subject to conditions stipulated by the authorities. These agreements regulate many aspects of the relationship between the partners and the operator, and also the relationship with the authorities. The operator in each production license is appointed by the authorities, and this company is responsible for the day-to-day license operations.
The steering committee is the supreme authority in a production license. Each of the partners in the license is represented on the steering committee. The voting rules are normally designed so that a majority in terms of both interests and the number of votes is required for a decision to be valid. The way the voting rules work, an owner with an interest of more than 50 percent cannot adopt a proposal alone.
The licensees can buy, sell and swap license interests, but this is conditional on the approval of the Ministry of Petroleum and Energy, as well as by the Ministry of Finance in matters relating to tax.