From the first licencing round in 1965 and first oil in 1971, right through to projects coming onstream this year, this blog gives a snapshot of Norway’s colourful oil and gas exploration history. A series of political decisions and world-class industrial developments lead to what is a thriving industry with discoveries still to be made. Take a trip back in time…
THE FIRST LICENCES
Back in 1958, major oil and gas operators were keen to explore the Norwegian Continental Shelf (NCS), however, the government and geologists had little faith and did not believe oil or gas could be found. The Ministry of Foreign Affairs from the Norwegian Geological Survey even commented that “the chances of finding coal, oil or sulphur on the continental shelf off the Norwegian coast can be discounted”.
It was four years later in 1962 that Phillips Petroleum, better known today as ConocoPhillips, applied to the Norwegian authorities for permission to explore the country’s territorial waters of the North Sea. The authorities decided that the entire continental shelf could not simply be handed to one company, therefore, if it was opened for exploration on the condition that more companies become involved. Operators quickly followed Phillips Petroleum’s lead, resulting in the Norwegian Government proclaiming sovereignty over the NCS in May 1963. This meant that clear boundaries were agreed before exploration commenced, including a treaty between Norway and the UK in March 1965 and later with Denmark.
With all agreements in place, and only the Government having the authority to award licences for exploration and production, Norway’s first licensing round was announced on the 13th of April 1965, and 22 production licences were awarded, covering 78 geographically delimited blocks.
1966 saw the birth of the Norwegian oil industry with the first rig being mobilised to the NCS. The Ocean Traveler semi-submersible began drilling on the 19th of July 1966 approximately 180 kilometres south-west of Stavanger.
84 days were spent offshore, drilling depths of up to 3015 metres were performed but discovery unfortunately failed. Cores, which are a small amount of rock sample, taken during the campaign demonstrated that the types of geological sediments sought by the oil explorers were in place, so there was still hope.
Before the second round of licences in 1967, a glimmer of hope came in the form of hydrocarbons discovered by Phillips with the Ocean Viking drilling rig on the Cod field. However, doubts were still running high, resulting in many companies that had participated in the first licensing round dropping out by the second round.
It wasn’t until 1969 that the first commercial discovery was made by Phillips Petroleum in the form of the Ekofisk field. Three rigs were operating on the NCS in the autumn of 1969 and gas had been found in the British sector, but nothing in the Norwegian sector. The ground-breaking discovery came in November, just as hope was running out. Following the news flash from Phillips, several more wells were drilled, and more messages of success were relayed. It was confirmed by the Norwegian authorities on the 24th of December 1969 that the discovery was commercial.
The technological advancements made by geologists were integral to the success of the discovery. This included a detailed analysis of the ‘composite log’, a log that recorded the gas shows, the lithology, the drilling depth and the speed of drilling. A key player was Max Melli who was the well site geologist on Ocean Viking when the Ekofisk field was discovered. Max was an experienced mud logger with a track record from both the Libyan desert and the North Sea. Upon his arrival in Norway, during the spring of 1968, he was the first to spot hydrocarbon shows in well 7/11-1, that found, what was much later to be developed as, the Cod field. His growing portfolio of success led to his job offer from Phillips as well site geologist.
The Ekofisk discovery was a defining moment in world petroleum history and is still today one of the largest offshore fields ever found.
“I thought we had found a gold mine instead of an oil reservoir!”
– Max Melli, well site geologist for Phillips Petroleum on well 2/4-2 in the Norwegian sector of the North Sea.
Following the spud of what was meant to be the last well in the Norwegian North Sea, Phillips Petroleum wanted to cease drilling, but due to rig hire commitments, they went on to drill in a further block. However, the well encountered a pocket in the bedrock containing gas under high pressure. There was a threat of an uncontrolled blowout when oil and gas started to flow up with the mud. This well was plugged and abandoned, and work resumed 1000 metres further away, where an oil reservoir was penetrated, defining the ongoing exploration work on the NCS.
First oil began flowing from the Ekofisk in 1971 and ordinary production started in 1972. Production was initially routed to tankships until a concrete storage tank was installed in 1973. The initial field development started with three production platforms: Ekofisk A, B and C. The field also contained substantial quantities of gas, which were eventually piped to Germany from 1977, marking the start to the huge volumes of Norwegian gas later sold to continental Europe.
With the Ekofisk in full production, there were no bounds to exploration activity.
During the 1970s, exploration on the NCS was confined to the area south of the 62nd parallel, however, the shelf was gradually opened, but only a restricted number of blocks were awarded in each licensing round. Foreign companies were responsible for developing the country’s first oil and gas fields in the early days. This changed when Statoil, now known as Equinor, was established in 1972, marking the beginning of 50 per cent state participation in each production licence. However, this rule was later changed so that the Norwegian parliament could decide whether the level of state participation should be lower or higher, depending on the circumstances.
Several major discoveries in other fields on the NCS were made through the next decade including the Gullfaks (1978), Troll (1983) and Åsgard (1981). The Frigg gas field, known as the first gas giant in the Northern North Sea, was also discovered, straddling the UK-Norwegian boundary. Norway had the largest share, so an agreement was made to run production from there with Elf Aquitaine, known today as Total, as the operator.
OUTLOOK FOR 2019 AND BEYOND
Fast forward to 2019, almost 50 years since the first oil was discovered, it is believed that approximately 42 per cent of the total expected resources on the NCS have been produced. Some of the early oilfield discoveries, including the Ekofisk, are still producing today.
More than 3000 wells are set to be drilled over the coming decades by Equinor who are taking the lead to sustain the NCS for continued high-value creation and low emissions. The major operator is on track to maintain profitable production from the NCS at current level towards 2030.
Recently, Equinor has proved more gas and condensate close to the Kristin field in the Norwegian Sea. The West Phoenix rig began drilling the Ragnfrid North exploration well in October 2018 which has resulted in the prospect of 6-25 MMboe recoverable. Equinor added that this latest find will likely lead to the drilling of other prospects in the central part of the Norwegian Sea.
The NCS is predicted to reach a mature lifecycle stage within the next 10 years or so which means that now is the time for operators to consider asset integrity procedures to mitigate the challenges associated with ageing platforms.
Probe offer a range of refurbishment and upgrade services to keep offshore assets at their optimal condition. Refurbishing and recertifying existing equipment are a cost-effective and sustainable option for our clients. Any parts can be re-machined to the client’ specifications and back to their original state before being returned for final testing. Probe maintain close links with fellow Acteon companies who have regional offices in Norway and we regularly visit to meet with existing and new clients. This has resulted in a growing portfolio of work within the region.
Let us know your memories from Norway’s early oil days or your thoughts on the future of the continental shelf in the comments below.