There is high interest for oil and gas exploration in the new unlocked areas of the Barents Sea, as announced recently in the 23rd licensing round in Norway.
In particular south-east Barents Sea areas are so far unexplored, leaving an ‘ocean of opportunities’ ahead.
Liv Hovem, DNV GL’s oil & gas divisional director for Europe and Africa, said: “We have identified close to 30 challenges to enable year-round oil and gas production in the area.”
Oil was first confirmed in the Barents Sea in 2000 the Goliat field, 50 miles north west of Hammerfest. This will become the first oil field in the Norwegian sector of the Barents Sea, and will be developed with a cylindrical, floating production facility. Statoil’s Johan Castberg field (which is not yet in production) is the northernmost significant oil discovery in the Barents Sea.
Roald Sæter, geologist in the Norwegian Petroleum Directorate with responsibility for following up fields in the Norwegian Sea and Barents Sea, characterises Goliat as a “fairly large field” with an infrastructure that will be significant for the development of new oil discoveries in the areas.
He added: “The Barents Sea has a much more long-term perspective as regards resource development than the other areas on the Norwegian shelf, and the Barents Sea North has yet to be opened for exploration activity.”
However, new challenges accompany the harsher, darker and most of all, colder operational conditions, requiring adaption of new technology and all time high expectations for safe and sustainable operations.
When the industry gathered at the recent Arctic Frontiers conference in Tromso in north Norway, to discuss the global crossroad between commercial and environmental interests of exploration in the Arctic, DNV GL presented its latest industry collaboration project together with Statoil, to tackle the Barents Sea ice challenge head on.
DNV GL promotes joint industry projects (JIPs) as a tool to accelerate the technology development needed in meeting the challenges of oil & gas exploration in northern areas.
Under the project name FOLLOWS (floating structures: loads and load effects from waves and sea ice) DNV GL will join forces with industry parties as well as academia through the Norwegian University of Science and Technology.
The JIP is in the initial phase and DNV GL and Statoil welcome industry players to join the project.
Hege Berg Thurmann, DNV GL’s Arctic Group Leader, said: “We believe that projects like the FOLLOWS JIP show that the required technology for oil and gas operations in the Arctic can be developed and implemented more cost-efficiently through collaboration – where definition of best practice also leads to standardisation and increased efficiency.”
Bente Nyland, (pictured) Director General of Norway’s Petroleum Directorate (similar to DECC in the UK) commented in her annual report for last year:
“We have had some positive news in 2015, despite the negative trends. Several new wells and good regularity on the fields have delivered an increase in oil production for the second consecutive year, and it will remain high in the years to come.
A new gas sales record was also set as a result of higher demand from Europe.
“There was a substantial drop in revenues, but the industry continues to make a strong contribution toward maintaining Norway’s general welfare level.
“Even in a demanding year, it’s good to see that the oil and gas industry is still the country’s largest, with total export values reaching well over NOK 400 billion.
“It is also gratifying to see that the industry has invested substantial effort in increasing efficiency. This work is starting to materialise in the form of lower costs.”
“Eighty-two fields were in operation at the end of 2015, compared with 51 ten years ago. This illustrates the enormous development activity that has taken place in recent years. Never before have more wells been drilled than in 2015, when exploration wells are included”.
More than half of the resources on the Norwegian Shelf have yet to be produced. But the Director General is concerned that sinking oil prices will mean that measures will not be implemented, and resources will be left in the ground.
She added: “We see a tendency for the companies to prioritise short-term earnings rather than long-term value creation.”