Invitation

The Royal Ministry of Energy (the Ministry) is hereby announcing an invitation to apply for a licence pursuant to Regulation No. 1517 of 5 December 2014 relating to exploitation of subsea reservoirs on the continental shelf for storage of CO2 and relating to transportation of CO2 on the continental shelf (the CO2 Storage Regulations). 

 

The CO2 Storage Regulations are aimed at exploitation of subsea reservoirs on the continental shelf to store and transport CO2 on the continental shelf. Companies that aim to carry out activities as mentioned require a licence pursuant to the CO2 Storage Regulations. In addition, on 25 February 2020, the Norwegian Ocean Industry Authority stipulated the Regulations relating to safety and working environment for transport and injection of CO2 on the continental shelf (the CO2 Safety Regulations). To be awarded a licence, the applicant must have the financial strength, technical and geological expertise and reliability that is considered to be required to carry out activity pursuant to the CO2 Storage Regulations.

 

Licences under the CO2 Storage Regulations will be awarded pursuant to a so-called open-door policy. This means that the individual applicant(s) seeking a licence pursuant to the CO2 Storage Regulations can apply whenever they believe there is sufficient basis, i.e. a need, to apply for a licence. 

 

The Ministry will continuously assess received applications. If an application provides a good basis for awards, the area the State deems to be relevant will be announced with an appropriate application deadline for granting an exploration licence. 

 

Through the announcement process, the CO2 Storage Regulations' requirement for the award to take place according to "objective, published and non-discriminatory criteria", is met.

 

This announcement covers three areas in the North Sea, see enclosed maps and coordinates. The purpose of this announcement is to invite qualified companies to submit applications to be awarded a licence pursuant to the CO2 Storage Regulations. Companies that have the necessary competency and that have matured industrially sound and profitable projects, will be able to apply for a licence adjusted to the company’s need. 

 

Within the relevant area, the application should cover the reservoirs that the applicant wants to map or has mapped as suitable for storing CO2 and list the coordinates for the area the applicant believes the licence should comprise. The applicant(s) must document that the award of a new licence is necessary for implementation and/or further development of concrete, socio-economic profitable project(s) for capture, transport and storage of CO2. 

 

The licence's specific geographical scope, duration, any work commitments, and other specific conditions will be stipulated by the Ministry at the time of the award. 

 

If a licence pursuant to the CO2 Storage Regulations is awarded to multiple legal persons together, all participants must fulfil the conditions for the award. In such instances, requirements may be set regarding company structure and division of responsibility between the participants, and that a partnership agreement be entered into for the activities pursuant to the licence, cf. Sections 3-1 and 4-1 (6) of the CO2 Storage Regulations.

 

If a licence is awarded, requirements will be set regarding the completion of a work commitment within a deadline stipulated by the Ministry. If the work commitment is not completed within this deadline, the licence will lapse unless the Ministry consents to extending the deadline.

 

The various industries that want to contribute to socio-economically profitable activity are welcome in Norwegian ocean areas. It is not a question of either/or, but both, and this sets high standards for good coexistence between all types of commercial activity at sea. The Norwegian authorities expect both new and existing industries to take other commercial activity into consideration to ensure that the good coexistence at sea can continue. This must be part of the basis for selecting the storage location. Special environmental and fishery conditions may be set for the licence.

 

The Ministry reserves the right to negotiate with the applicant(s) on the following:

 

a. The area of the licence. 

 

b. Duration of the licence.

 

c. Work commitment with associated schedule, including deadline for submitting a plan for development and operation (PDO).

 

The Ministry may award licences to multiple applicants together and appoint an operator.

 

The following criteria will be used as a basis in awarding a licence pursuant to the CO2 Storage Regulations, the potential composition of licensee groups, and appointing operators:

 

a) The applicant(s)'s understanding of the geology in the geographical area in question and how the licensee plans to undertake additional efficient mapping of the area and the plan for storing CO2 in the reservoirs in question. 

 

b) The applicant(s)'s plans for development and realisation of safe storage of CO2 in the relevant geographical area.

 

c) The applicant(s)'s relevant competence, as well as how this can actively contribute to the activities under the licence. 

 

d) The applicant(s)'s contribution to the development of the value chain for CO2 capture and storage on the Norwegian Continental Shelf, and how the application is part of this.

 

e) That the applicant(s) have satisfactory systems for quality assurance and HSE. 

 

f) That the applicant(s) have satisfactory financial capacity to carry out all activities under the licence. 

 

g) The applicant(s)'s experience with CO2 storage on the Norwegian Continental Shelf or equivalent relevant experience from other areas, including experience within planning and developing storage locations for CO2, oil and gas fields, or geological gas storage reservoirs. 

 

h) The licence will generally be awarded to a joint venture where at least one licensee, as part of petroleum activities or CO2 storage, has drilled at least one well on the Norwegian Continental Shelf as an operator or has equivalent relevant operational experience outside the Norwegian Continental Shelf.

 

i) Applicants that are appointed as operators of licences pursuant to the CO2 Storage Regulations in the Barents Sea must, as part of petroleum activities or CO2 storage, have drilled at least one well on the Norwegian continental shelf as an operator or have equivalent relevant operational experience outside the Norwegian Continental Shelf.

 

An offer to award exploration licences pursuant to the CO2 Storage Regulations is subject to acceptance of the conditions stipulated by the Ministry, including acceptance of work commitments.

 

In line with the CO2 Storage Regulations, an applicant will normally be expected to be awarded an exploration licence prior to being awarded an exploitation licence in a relevant area. Exploration licences can be awarded to one or more competent companies. If a licence is awarded to multiple companies, the Ministry will generally appoint one of the companies as operator.

 

Exploration licences will normally be awarded with a work program with a binding phase and subsequent conditional phases with decision points for continuation or relinquishment. The work program will normally be concluded with a requirement that the companies make an investment decision on realising a CO2 storage location, and then submit a PDO for the storage location or relinquishment.

 

The size on area awarded, the duration of the exploration licence and the commitments that accompany such an award will be the result of a concrete assessment of the application(s), the authorities' own assessments and other potentially relevant aspects. The purpose of awarding storage licences is to facilitate the development of a new, commercial ocean industry on the Norwegian shelf. To achieve this goal, the Norwegian authorities will design a work program that ensure rapid and efficient progress in awarded area. The work program will aim to ensure that sufficient work is carried out under the licence to mature the awarded area into a secure storage location.

 

Licensees with exploration licences can apply for an exploitation license alongside submitting the PDO. Licensees that have completed their work program and submit a satisfactory PDO along with a sufficiently good application for an exploitation license can expect to be awarded an exploitation license. The holders of exploration licences must be confident that they will be able to complete started projects on which they have expended considerable resources, and the authorities must be confident that the awarded areas will be managed pursuant to the objective and that approved projects will actually be carried out. The authorities will assess the scope of the licence, both in area and stratigraphy in connection with awarding the exploitation licence.

 

Reporting of financial and company-related aspects must conform with the guidelines, which can be found on the Norwegian Offshore Directorate's website: Guidelines for application letters and company information (pdf)

 

Information of any nature which is communicated to the authorities in connection with the application will remain confidential until the licence is awarded, cf. Section 11-20 of the CO2 Storage Regulations. At this point, the information will remain confidential to the extent this follows from the Public Administration Act for a period of 20 years, cf. Section 13c (3) of the Public Administration Act.

 

Each application will be subject to an application fee prior to submission of NOK 123,000. 

 

If multiple companies join forces to apply for a licence, this will be considered a single application. In such instances, one of the companies will be responsible for paying the application fee.

 

The fee must be paid to the State, represented by the Norwegian Offshore Directorate, account number 7694.05.00326. The payment must be labelled "Licence pursuant to the CO2 Storage Regulations". A copy of the receipt for the paid fee must be enclosed with the application. 

 

The King in Council may determine that one or more licences shall be awarded within the announced areas but is not obliged to award licences on the basis of received applications. 

 

Applications for licences must be submitted to the Ministry in electronic format, with copies to the Norwegian Offshore Directorate and the Norwegian Ocean Industry Authority in the same format. 

 

The application must be labelled as follows: 

 

" Application for licence pursuant to the CO2 Storage Regulations ", 

 

and be submitted to; 

 

The Royal Ministry of Energy

c/o Section for Exploration

PO Box 8148 Dep

0033 Oslo, Norway

 

via L2S or Altinn

 

Copies must also be submitted via L2S or Altinn to:

 

Norwegian Offshore Directorate 

 

Norwegian Ocean Industry Authority

 

 

All applications received by the mentioned deadline will be considered to have been received at the same time.