Whilst the call for more frontier exploration and the associated likelihood that bigger fields are being found is getting louder, it is important not to forget that infrastructure-led exploration is also very worthwhile on the Norwegian Continental Shelf.
Anders Wittemann showed a series of creaming curves during his presentation at the NCS Exploration Strategy Conference in Stavanger recently that clearly showed an ongoing upward trend, even when including all major discoveries made from the start of exploration in the area (Left graph in below illustration).
In the plot on the right, discovered volumes have been split per licence type since 2010. This shows that a lot more wells have been drilled in licences awarded in APA rounds than in the traditional and more frontier licence rounds. The “APA graph” also illustrates that more wells were required to discover the same volume as drilling in acreage that was awarded during the traditional licensing rounds. This is no big surprise though, as the APA rounds are focusing on the more mature and near-infrastructure areas of the NCS.
Comparing the two “Rounds” creaming curves, both trend in the same direction, despite the differences in lengths of time acreage has been held. The more recently awarded blocks have delivered slightly more – Round 16 took place in 1999 – primarily thanks to the Wisting discovery. It also shows that exploration in long-held acreage is still paying off, as the King-Prince discovery made in one of the oldest licences on the NCS has illustrated quite recently.
Despite the higher number of wells required in the APA blocks, this creaming curve also shows that exploration in the more mature areas has been the most dominant way of adding reserves since 2010. One of the biggest advantages of ILX-driven exploration is that newly discovered volumes can be put on production quickly, enabling companies to rapidly recover exploration costs.
Development or exploration?
Due to the dominance of ILX-driven exploration, the boundary between what can be regarded as exploration and what is infill drilling may sometimes get a bit opaque. Wittemann showed that the most valuable discovery on the NCS since 2019 is Tyrihans Nord Ile in the Norwegian Sea. This compartment below the main Garn reservoir of the Tyrihans Nord field was drilled by well 6407/1-A-3 BH. The NPD carried the well as a development well. Against this backdrop, Wittemann said that some may argue for Tyrihans Nord Ile to be regarded as a further development of an existing field instead of a new discovery. Yet, Patrick Stinson from TotalEnergies, keen to support his company’s exploration strategy, noted that the well was drilled updip of a dry hole, making a case for an audacious exploration effort.
Looking at a bit more detail to the results this year, it must be said that 2022 is probably not going to be a record-breaking one. In total, 233 MMboe has so far been proven, which is significantly less than the 457 MMboe discovered last year. Aker BP’s Storjo East in the Norwegian Sea is the biggest find one to date this year, with an estimated recoverable gas volume of between 25 and 80 MMboe. Appraisal drilling is now planned for 2023.
Yet To Find
With between 6 to 30 billion barrels yet to be found on the NCS, there is still room for exploration in the years to come. And as Kjersti Dahle from the NPD reiterated, there are almost 1,300 leads and 1,200 prospects in NPD’s Treasure Chest waiting to be worked up to drilling targets. Expected volumes for the majority of these prospects are modest though, with most prospects falling into the 13-31 MMboe bracket.
