The End of the Beginning
These days, one often hears “the Norwegian Continental Shelf (NCS)” and “mature” in the same breath.

In our youth-oriented culture, “mature” is often used as a quasi-polite term for something or someone who’s past the prime, that is, old and used-up. When it comes to the NCS, perhaps the exciting days of mega-discoveries may be past, but that by no means is any indication that the NCS should be written off. A recent press release from the Norwegian Petroleum Directorate claims that the shelf holds more resources and that less than half of the total has been exploited. Given that, the NCS may still be hiding a mega-discovery or two.

It’s better to think of “mature” in a mature manner. It’s no wonder that Norway often refers to its experience with its oil wealth as the “Norwegian Adventure” – its first three decades have been exhilarating, but things have certainly settled down. Likewise, youth is an exciting time of discovery and wonder, but eventually youth fades and maturity comes, implying self-knowledge, stability and reliability.

In that sense, the NCS is right on track. The Norwegian authorities have worked hard to gather data, making the NCS one of the world’s best-documented offshore areas. Although the rules are considered heavyhanded by some, the consistency and transparency of the system means that operators know exactly what they are getting into when they work on the NCS. The area is reliable because beyond the accumulated data, we know that fields are there – many have been found – although they’ve been set aside as monetary or technological constraints make their profitability marginal.

The authorities are now working hard to sell the NCS. A Why Norway? public relations campaign and pure positive thinking comprise the most recent pitch. It’s not without reason that they can be positive. The 18th licensing round finds 18 companies submitting applications, a total that’s five greater than in the 17th licensing round and includes ten companies that did not participate at that time. The opening of 95 blocks for this latest round sparked a national debate: many were concerned that so many blocks would mean too much activity on the shelf. But that extreme scenario hasn’t come to pass, and the strategy to encourage more and new companies’ participation has bourn fruit. Those who work in the industry have cause to be optimistic, and hopefully it is not a case of too little too late.

Two more aspects of maturity – patience and self constraint – may need to be applied during the coming months when the Norwegian government, along with the authorities, discuss the monetary aspects of doing business on the NCS. Norway has perhaps the world’s most responsible outlook when it comes to ensuring that oil and gas revenues benefit its people. No one can fault the authorities’ intentions, but perhaps it is time to be more patient and relax tax requirements a bit. Companies are held accountable by their investors, and the authorities have the same responsibility to the people. Both have implied that the other is somehow greedy, yet both are in the business of ensuring a profitable outcome.

Incentives for investment already exist, but the bottom line is that companies focus on the bottom line. Why Norway? indeed, when the tax burden in the Gulf of Mexico or the west coast of Africa is far less, and even home-grown companies such as Statoil and Norsk Hydro find that they have an easier time abroad.