Norway speaks of record interest in offshore oil and gas

Jan. 17 (UPI) -- With new licenses mostly in the North Sea, the Norwegian government said it secured its reputation as a predictable oil and gas producer in its latest auction.

The government concluded its annual auction for oil and gas licenses, handing out 75 new awards for the continental shelf.

"The number of licenses is the highest ever awarded in a licensing round on the Norwegian continental shelf," Minister of Petroleum and Energy Terje Søviknes said in a statement. "Access to new, prospective exploration acreage is a central pillar in the government's petroleum policy."

The Norwegian Petroleum Directorate, the country's energy regulator, said the auction this year was also one of the most diverse, with licenses spread out among small and international majors. Of the 75 production licenses, 45 are in the North Sea, 22 are in the Norwegian Sea and eight are in the Norwegian waters of the Barents Sea. Of the total, 22 are production licenses that are add-ons to existing assets.

Apart from Russia, Norway is the top oil and natural gas supplier for the European economy, designating nearly all of its offshore production to the export market. The NPD reported preliminary figures for November, the last full month for which it published data, at 1.46 million barrels of oil, 316,000 barrels of natural gas liquid and 31,000 barrels of condensate, an ultra-light form oil.

Analysis from Wood Mackenzie said full-year 2018 production should be about on par with the recent average, though November estimates were lower than expected in part because of the closure of the Goliat field in the Barents Sea, operated by Italian energy company Eni and shut down briefly on safety concerns.

While the Norwegian waters of the North Sea saw the bulk of the focus in the latest rounds, it's the Barents Sea that may hold the most promise for Norway. The NPD last week said around 60 percent of the undiscovered resources are in the Barents Sea and it's there where maintaining a high level of production may be important over the long term.

There were 85 fields in production on the Norwegian continental shelf last year and, while oil production was slightly lower, total output increased for the fourth straight year

NPD Director General Bente Nyland said last week that exploration and production activity needs to increase, both from frontier and mature basins, in order for Norway to maintain its reputation as a major producer.

"If production is to be maintained at a high level also beyond 2025, more profitable resources must be proven, including in major discoveries," she said in a statement.