Home and Away
More than 1 billion barrels of oil are produced annually from the Norwegian Continental Shelf (NCS). But nothing lasts forever, especially not non-renewable energy sources. Oil discoveries on the NCS has for many years been less than what is produced. In 2001 that was also the case for gas production and exploration. Discoveries counted for less than what was produced.

Which is a major reason why Norsk Hydro and Statoil are arguing hard for a further opening up for exploration in the Barents Sea and northern areas of the Norwegian Sea. At the same time the present Norwegian government has started talking about ‘oil-free zones’. It is a puzzling term, and might serve as an example of lack of holistic perspective in the planning of the industrial politics. As one of our writers has pointed out, most areas are in fact ‘oil-free’.

While environmental organizations strive to constrain exploration in environmentally sensitive areas, the future of the oil companies depends on being allowed to locate and develop new fields. As long as we are making a living, and fuelling our society, on non-renewable resources, we need to ensure our oil companies have predictable and competitive conditions.

It is predicted 2003 will be an extremely bad year when it comes to exploration in Norwegian waters. The immediate effect is a downturn in the rig-market, which we have already seen. In the longer term we could se a downturn in the offshore supply industry as a whole. Very few major contracts are expected in 2003, save Snøhvit. Pessimistic voices are concerned that not only exploration but also development expenditure on the NCS will be extremely low in 2003. However, the Norwegian Petroleum Directorate (NPD) has predicted total investments on the NCS of a value of NOK 70 billion next year.

And all is not bleak. Statoil has been awarded operatorship in Iran, and has good hopes for greater involvement in Venezuela, just to mention some positive happenings abroad. This is also encouraging for the Norwegian supply industry, as it opens up new markets.

Also, there have been discoveries on the NCS this year. Statoil recently proved more oil and gas in the Tyrihans South discovery in the Norwegian Sea and found oil in the Dolly prospect in the Tampen area of the North Sea. Knut Chr. Grindstad, who is exploration vice president for the Halten/Nordland business cluster, characterized the results of the well as gratifying. ‘But we need a number of such discoveries in future to keep our processing facilities fully occupied and to continue developing the area,’ he adds.

So at the moment there are exciting activities on the NCS but they need fuelling to keep up the pace. Whatever the value of the investments in 2003 will be, in the long-term Norway’s oil & gas industry needs a more predictable petroleum policy.

What we might see in the future is a decrease in activities on the NCS, because we are afraid the Norwegian oil companies are not clean enough. And at the same time an increase in activities abroad, where Norwegian companies are seen as introducing high standards. Environmental work is just as international as the energy industry, so it might be advisable also for environmental organizations to develop a more holistic perspective.