Opportunity Abounds

Thinking back a couple of years – all the way back to late 2010, early 2011 – we can recall a time of celebration. 2011 was the year when the 2010 Avaldsnes/Aldous discovery, later renamed Johan Sverdrup, kept making headlines as a series of appraisal drilling revealed its dazzling scope: 1.7 to 3.3 billion boe of gross recoverable resources. 2011 also included the Skrugard discovery in the Barents Sea. Not since the 1980s had the Norwegian Continental Shelf seemed so promising.

And since then, one headline we’ve seen repeatedly focuses on the need for more personnel – especially engineers – to keep the industry moving forward.

Yet now, at the end of 2013, we’ve begun to hear that some are worried that the new year may not be a year of growth – that we’re reached a plateau.

But the North Sea has always been the stimulus for strong opinions. Well over 50 years ago, the consensus was that offshore hydrocarbons in this region probably didn’t exist.

The discovery of gas at Groningen in the Netherlands in 1959 lead to a major revision of the thinking about the petroleum potential of the North Sea. And a decade later, with the Ekofisk discovery in 1969, and the Norwegian oil adventure really began with production from the field starting on 15 June 1971.

With our first Commentary, in our first issue (Volume 1, Issue 1, 1973), our publisher called for the Norwegian authorities to move to stimulate the industry. It was a direct, no-holds-barred statement – so direct that it’s easily quoted in its entirety here:

“We apply to our Government as soon as possible to end the postponing of giving oil-block-concessions in the North Sea. It concerns enormous possibilities for the economy of our country, and for the supply of energy of our part of the world as well (experts say that Norway’s oil areas are the second biggest in the world). The repeated postponing will lead to unreasonable conditions for our industry. In this case one must look across the lines and programmes of political party politics and consults industry and international expertise to solve the problems to everybody’s satisfaction.”

Although that early appeal was directed towards a specific decision the Government needed to make, one theme of the message resonates today: that actions speak louder than words.

Now, 40 years later, it’s easy to see how much has been done – and how much has been done successfully.

Yet, the spectre of the recent “Credit Crunch” still haunts many, and even now, nearly five years down the line, the slightest downturn, or even a levelling out, is seen by some to be an omen of doom. Paradoxically, prior to the crunch, the experience of protracted growth – a record-breaking era of growth in some parts of the world – had many thinking that sustained, unlimited development would be the norm.

What has some worried now is that the level of activity and spending may not exceed that of the last few years – which has broken all records. But we look to the work that’s planned and the areas that are yet to be developed and see opportunity. There’s much to do across the NCS, whether we look to mature areas (where Johan Sverdrup was found) to the new frontiers such as the Barents Sea.

So much has been happening over the course of the last four decades. From a modest start in the beginning of 1970s, the industry has played a major role in shaping the economy of today’s Norway, including a global technological reach that goes well beyond oil and gas exports.

In spite of more than 40 years of production, estimates in 2012 only around 42 percent of the total expected resources on the NCS have been produced – so let’s get busy.