Published: 12/03/2021
The Norwegian Continental Shelf (NCS) contains some of the world’s largest oil and natural gas reserves. At the end of 2020, the Norwegian Ministry of Petroleum and Energy estimated that the NCS contains more than 8 billion standard cubic meters of oil equivalents (discovered and undiscovered) that have yet to be produced and sold. Much of these remaining reserves, while technically recoverable, risk being classified as marginal by operators who are working with smaller capex and opex budgets than those of the past. While global lockdowns, driven by coronavirus, induced depressed commodity prices, which in turn contributed to tighter E&P budgets, environmental, social, and governance (ESG) factors have emerged as increasingly critical drivers in the industry’s budgetary guidance and planning decisions. In the coming years, capital and carbon intensity discipline are likely to lead to fewer new large discoveries in the NCS. Subdued frontier exploration and capex-intensive greenfield development activity will ultimately make it more challenging for regional operators to replace their reserves. For this reason, many operators are shifting their focus to increasing recovery from existing well stocks, tapping into smaller near-field discoveries, and exploiting and extending the life of existing infrastructure.
This article originally appeared on the Hart Energy website in December 2021.
