June 21 (UPI) — Beyond 2025, oil and gas production from offshore Norway will need to come from undiscovered resources if the trend line is to remain steady, a report said.
The Norwegian Petroleum Directorate, the nation’s energy regulator, reported in its annual resource forecast that just under half of all the expected resources on the continental shelf are in discoveries yet to be found. Nevertheless, the NPD said its surveys resulted in an increase in the estimate of undiscovered resources from 18.2 billion to 25.2 billion barrels of oil equivalent.
Most of those undiscovered reserves are thought to be in the Barents Sea, with half of that in areas yet to be opened in the far north reaches of those waters. Thursday’s report follows the release of results of the latest licensing round for the Norwegian waters of the Barents Sea.
Norway is one of the main suppliers of oil and natural gas to the European market, apart from Russia. For Norway, oil and gas operations represented about 14 percent of the nation’s gross domestic product and 40 percent of its export value last year.
“The industry has shown considerable interest in the most recent rounds, and after a few years of less exploration activity we are seeing this pick up again,” NPD exploration director Torgeir Stordal said in a statement. “This is important for the resource potential to be proven and produced.”
The forecast, however, finds oil and gas production starts to decline gradually beyond 2025. If production levels are to continue at current rates of around 1.6 million barrels of oil equivalent per day, more production and proven discoveries are necessary.
The Johan Castberg offshore Norway should enter production in 2022. It has recoverable reserves in the range of 450 million to 650 million barrels of oil equivalent and could produce for more than 30 years. What’s thought to be left offshore corresponds to about 40 Johan Castberg fields.
The NPD’s report said trends so far show new discoveries are small, and getting production started at those finds can be costly. But even small discoveries can be commercial if tied into existing field infrastructure.