Target for growth in oil reserves
The NPD has established an ambition of increasing reserves in 2014-23 by 1 200 million scm of oil. This is intended to ensure that attention is focused on expanding reserves while making it possible to follow up developments systematically.
The new ambition for reserve growth is 50 per higher than its predecessor. That increase largely reflects a substantial expansion of oil in the discovery portfolio since 2005
The figure below presents the rise in oil reserves compared with the growth rate in the 2014 forecast. “Fields in 2014” represents the increase in reserves from fields which were on stream or sanctioned for development before the target was set. Growth here has been in line with the forecast.
“Discoveries before 20915” represents oil reserves in fields proven before the target was set, and sanctioned for development afterwards. The figure shows that development decisions in 2016 yielded a smaller-than-expected rise in reserves.
Optimistic about meeting the target
The first development phase on Johan Sverdrup was sanctioned in 2015. Five plans for development and operation (PDO) were submitted in 2016. Based on figures from the companies, the NPD expects the 2016 level to be maintained over the next few years. Big projects such as the next development stage on Johan Sverdrup and bringing Johan Castberg on stream will make a strong contribution to reserve growth in the near future.
In addition to 991 million scm covered by development plans, 863 million scm of oil is found in fields and discoveries not currently scheduled for recovery. If all these projects are concretised and sanctioned by the end of 2023, total growth in oil reserves would be almost 1 300 million scm over the decade – in other words, well above the target set in 2014.
However, not all these projects are likely to be sanctioned by 2023. That applies particularly to the least mature and concrete projects. Resources concretised in field projects and discoveries represent the growth expected to be sanctioned by 2023. The gap shows the additional decisions required.
The resources are identified. This emerges from the NPD’s resource accounts. New discoveries will also be made which could be sanctioned for development within the target period. The NPD is accordingly optimistic about meeting its goal.
Above expectations on fields
At 31 December 2016, fields had contributed four per cent more than expected when the target was set. Given the challenges faced by the industry since the spring of 2014, this must be regarded as a positive development.
The companies are taking action to improve recovery, decide on additional wells, and concretise new measures despite the decline in oil prices. Much work nevertheless remains to be done. Recovery from the fields must be further improved, and the licensees must decide on new measures if the target is to be met.
Growth in oil reserves on fields amounts to 101 million scm. More than half of this increase derives from drilling decisions. Development and adoption of new drilling and well technology must therefore have high priority.
Decisions to develop supplementary resources in fields (which also requires the drilling of additional wells) contributes 10 per cent. Supplementary resources cover deposits associated with the field but not covered by the applicable PDO. An example is the deposits which make up the west flank of Oseberg. A decision to develop these was taken in 2015.
“Updating of models” contributes 35 per cent. This category embraces such changes as updating reservoir models and computational assumptions.
An example of such adjustments is provided by the Ivar Aasen field, where further investigation after the development decision showed that it was larger than earlier thought. That led to its reserves being increased by more than 30 per cent.
Executing major projects such as the next stage of Johan Sverdrup and the Johan Castberg development will make a strong contribution to reserve growth in the next few years.
New projects on fields and discoveries will make even more of the remaining resources profitable to produce