Fact box – Value creation from discoveries of different sizes

The profitability calculations show that both small and large discoveries have been important for overall value creation from exploration over the past 20 years (Figure 3.8). About half the value creation has derived from discoveries larger than 25 million scm oe.

These are Johan Sverdrup, which alone accounts for 35 per cent of the value created, and eight discoveries in the 25-100 million scm oe range which collectively contribute 14 per cent. These discoveries are important for developing infrastructure and other discoveries in the areas around new or existing field centres

The other half of the value creation comes from discoveries smaller than 25 million scm oe. More than 60 of these are in the five to 25 million scm oe range and account collectively for 37 per cent of the value created. The smallest discoveries have also contributed a substantial proportion of total value creation, since even very small deposits can provide good profitability when developed in a cost-effective way towards existing infrastructure. In addition, it is important to exploit capacity already developed and enhance the profitability of fields approaching cessation. Over the past 20 years, about 120 discoveries of less than five million scm oe have accounted for roughly 14 per cent of total value creation on the NCS.

Figure 3.8 Present value contribution from various discovery sizes (7% discount rate).