European gas supplier Norway awards licences to seven companies in least explored offshore areas

Tuesday, 02 March 2021
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Norway, the main West European supplier of long-term pipeline natural gas directly to Germany, France Belgium and the UK, said seven companies had applied for production licences in the 25th licensing round on the Norwegian shelf with any gas finds providing more competition to LNG cargoes from outside the region.

“The numbered rounds are focused on key parts in our least explored, open areas,” said Tina Bru, the Norwegian Minister of Petroleum and Energy.

“They are an important supplement to the APA (awards in pre-defined areas) rounds as exploration activity in immature areas gives the state as a resource owner more knowledge about the resource potential,” explained Bru.

“It enables us to identify resources and create value for the community. We will now start processing the applications from the seven companies,” she stated.

Norway, while being the main pipeline natural gas supplier to Europe, along with Russia’s Gazprom, is in competition to LNG deliveries from nations such as Qatar, the US, Nigeria, Algeria and Trinidad and Tobago, as well as Russia.

The Norwegians are also the only large-scale producers of LNG in Western Europe from the Hammerfest LNG plant, which has been closed until the third quarter of 2021 because of ongoing repairs from a fire in September 2020.

Damage caused by the fire at the LNG facility will take until around October 2021 to repair.

The fire, in which no one was killed nor injured, suffered its main damage from large amounts of seawater from the extinguishing process downing auxiliary systems such as electrical equipment and cables.

Feed-gas for the single-Train Hammerfest liquefaction facility, which exports around 5 million tonnes per annum of LNG, comes from the Snohvit gas field in the Barents Sea.

The 25th licensing round comprises nine areas outside the APA area on the Norwegian shelf.

The round was announced on the 19th of November 2020 and includes one area in the Norwegian Sea and eight in the Barents Sea.

The companies that have applied for production licences are: Norske Shell; Equinor Energy; Idemitsu Petroleum Norge; Ineos E&P Norge ; Lundin Norway AS; OMV (Norge) and Var Energi AS.

Norway also allocates exploration areas on the Norwegian Continental Shelf and these take place annually through two equal licensing rounds.

These rounds include areas in the most famous exploration areas. As exploration activity has been going on for several decades, the most well-known exploration areas now include most of the North Sea and the Norwegian Sea and a large part of the Barents Sea to the south.

The Ministry in January 2021 awarded 61 upstream licences in pre-defined areas of the NCS to 30 licensees, including prominent LNG players such as BP, Shell, Total and Eni of Italy, as well as ConocoPhillips, the only bidder among US majors.

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