Foreword
Fifty years have passed since the Norwegian Petroleum Directorate (NPD) was established by the Storting (parliament) and located in Stavanger. Its creation occurred a decade after Phillips Petroleum wrote to the Norwegian government to request exclusive rights to explore for oil and gas in those parts of the North Sea which lay within Norway’s territory. The government rejected this request and the following year proclaimed Norway’s sovereignty over the Norwegian continental shelf (NCS). A new Act was passed which specified that the right to submarine natural resources was vested in the state and that only the King (government) may give permission to explore for and produce natural resources.
The first offshore licensing round was conducted in 1965, with the first wildcat spudded the following year. A total of 27 wildcats were drilled before a commercial discovery was made – Ekofisk in 1969. This was the world’s largest offshore oil field, and trial production began just two years after its discovery. Ekofisk has now produced for more than half a century, and its production licence was extended in 2022 from 2028 to 2048.
With Ekofisk declared commercial, it was clear that the petroleum industry had arrived in Norway to stay. That made it necessary for the government to strengthen national management and control of the sector. In 1972, the state’s involvement with petroleum activities was divided into three parts – a ministry (now the Ministry of Petroleum and Energy – MPE), a state oil company (Statoil, now Equinor) and a regulatory agency (the NPD).
Companies have subsequently explored, discovered and produced, developed and adopted new technology, and built up a unique Norwegian expertise. Throughout these 50 years, the NPD’s main goal has remained in principle unchanged – to contribute to the greatest possible value for society from the oil and gas sector through efficient and prudent resource management which takes account of health, safety and the environment as well as other users of the sea.
A good and updated factual basis is a precondition for effective and prudent resource management. The NPD therefore regularly produces a resource report which provides an overview of petroleum resources, activity and value creation on the NCS. This report describes and analyses development trends and driving forces in order to help support a knowledge-based and predictable management of the petroleum resources.
This year’s report presents the analyses which underlie the NPD’s updated estimate of undiscovered resources on the NCS. Since output began in 1971, half the total expected resources have been produced. This means that the remaining half could provide the basis for many decades of continued production.
The past two years have been unsettled and affected by the pandemic, climate concerns and very high energy prices. The effects of these factors and the war in Ukraine following Russia’s invasion in February 2022 make it more difficult than ever to predict developments. Owing to the loss of Russian gas deliveries and lack of alternative supplies, mothballed coal-fired power stations are again being taken into use in Europe.
With a European continent which needs increased deliveries of both oil and gas, and which has great ambitions for reducing greenhouse gas emissions, Norwegian deliveries with a low climate footprint and low costs could become even more important. Such supplies can contribute to both reduced emissions and increased energy security.
This requires that operations on the NCS are maintained through active players, a high level of exploration and purposeful technology development. In this transition, it is important to exploit synergies between value chains and the transfer value of expertise built up through 50 years of petroleum operations. At the same time, good coexistence on the NCS will always be a precondition for overall value creation – both for the industries concerned and for society as a whole.
Kjersti Dahle Grov
Director for technology, analysis and coexistence (TAS) (acting)