In NPD’s press release announcing the APA 2021 awards, there is an interesting remark: “This year’s awards show that there is still great diversity among the players,…”
The key in this sentence is the word still. It seems as if the NPD is hinting towards a trend of decreasing diversity. Do the numbers reflect this? In a way, they do.
First of all, still may allude to the upcoming mergers between Lundin and Aker BP and between Sval and Spirit Energy Norway. Even though that would only reduce the number of companies awarded licences by two, it is the size of acreage companies like Aker BP, Lundin and Spirit normally apply for individually that will have an impact on the diversity of the applications and awards in years to come.
Secondly, when looking at the number of companies having been awarded licences in the last eight years, this years’ number of 28 companies is the lowest. 2014 saw the most diverse operator landscape with 43 companies welcoming an award, but this decreased towards the 30 mark in all the years that followed. In that sense, the 40+ number of companies seem to stem from a time when oil prices were north of $100. Whether the 28 of this year is part of a trend that will only go down remains to be seen, but the words chosen by the NPD seem to reflect this.
The number of licences awarded is also the smallest when looking back to APA 2014. Interestingly, it peaked in 2018 – when confidence was probably returning after the 2014 crash – but is on a downward trend since.
What else can be observed from looking at the awards? Please use this link to the NPD site to see the locations of the awards on maps.
Barents Sea – more awards than APA 2020
Five licences were awarded in the Barents Sea. This may look like a small number, but when realising that it is three different operators this time (Equinor, Lundin and Vår Energi) versus one operator in the 2020 round being awarded only three licences, it may not be too bad.
Equinor and Wintershall Dea remain committed to northern part of Norwegian Sea
It is interesting to see the award of licence PL1167 to Equinor and Wintershall Dea. It is one of the more “frontier” areas in the APA round and knowing that Wintershall drilled the subcommercial Toutatis prospect (6611/1-1) in 2019, it shows that the Germans are still keen to keep exploring the area.
No awards for Mol
There are no awards to Mol this year. That is not a surprise, given that the company decided to exit Norway. But it shows that the company must have made the decision some months ago, when the results of the Iving appraisal campaign were still fresh.
PGNiG
There are two intriguing awards for PGNiG in the southern part of the North Sea. Is the company embarking on a similar Mandal High campaign as Mol?
Spirit very active
Given that Spirit Norway has now been sold (pending regulatory approvement) to Sval, and that negotiations must have taken a fair amount of time, it is interesting to see that Spirit was awarded a fair number of sometimes chunky licences. For instance, PL1147 covers a large area north of Frigg.
ConocoPhillips and DNO in Stord Basin
A very interesting award is PL1146 in the Stord Basin to ConocoPhillips and DNO. With Equinor drilling a dry hole in the area just last year, which may well have slowed down interest in the basin even more, it is of particular interest to see that other companies remain committed to the area. It shows that a diverse operator landscape is important to keep on challenging beliefs.
HENK KOMBRINK
