steinar njå norwegian petroleum directorate licensing system in norway
Post on 19-Dec-2015
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Steinar Njå
Norwegian Petroleum Directorate
Licensing system in Norway
Discretionary system
The Government invites companies to apply for exclusive rights to petroleum activities in designated blocks
Based on applications production licences are awarded
Production licence contains an exclusive right to exploration, drilling and production of petroleum within the license area
The licensee is the owner of his proportionate share of the petroleum produced
Licensing system in Norway
Licensing system in Norway
company activities
Government activities
100 %
100 %0 %
0 %
exploration development and production
Oil companies vs. the Government
Licensing system in Norway
Opening of new areas for exploration Areas not opened for exploration (NPD)
Geological and geophysical data acquisition by NPD Scientific data acquisition
Areas opened for reconnaissance (oil companies, contractors) Seismic data, sea bed samples etc.
Impact assessment (MPE) Environment, trade and industry, risk of pollution, economic and
social effects Ministry proposes opening of areas for licensing
Overall consideration of resource potential and impact on society White paper to the Parliament
The Parliament opens new areas for licensing
60°
70°
80°
-30° -20° -10° 0° 10° 20° 30° 40° 50°
60°
20° 30°10°
70°
RL9803006
JAN MAYEN
NORTHOpened for expl. drilling on special
BARENTS SEA
NORWEGIAN SEA
RIDGE
Ocea
nic
crus
t
SEA
Basement
Not opened for exploration activity
Not opened for exploration drilling
conditions
Opened for exploration drilling
Basement
Total area: 1.4 mill km2
Open for exploration drilling: 60%
Licensed: 16 % of open area
The Norwegian Continental Shelf
Licensing system in Norway
Licensing process Licensing strategy
ConsultationNPDIndustryOther authorities
Nomination Oil companies suggest blocks for licensing
Ministry announces blocks available for application Companies apply
Pre 1999: Only single applications Present: Groups and/or single applications
New licenses awarded by the Government
The Norwegian licensing round
Announcement Application Award
Negotiation
AnnouncementNomination
NPD performs own evaluations of announced areas. This forms
an important basis for the evaluation of applications.
The Norwegian licensing round
Nomination Selection of blocks in a licensing round is based on
Strategic fit Commercial potential Value of information Industry interest and focus
Industry may influence the selection Pre-nomination consultation Nomination of specific blocks and areas
Ministry receive nominations of blocks from the companies Ministry and NPD cooperate on evaluating the proposals Ministry design the licensing round
The Norwegian licensing round
Announcement Application Award
Negotiation
AnnouncementNomination
NPD performs own evaluations of nominated areas. This forms
an important basis for the evaluation of applications.
The Norwegian licensing round
Announcement of blocks and areas
Who can apply
List of blocks and areas
Conditions for the award
Negotiation issues
Award criteria
Documentation requirements
Fee for handling of an application: NOK 60 000,-
Application deadline and time of award
The Norwegian licensing round
Awards in Predefined Areas Announced in January
Application deadline1 October
Awards by the end of the yearBarents Sea
Norwegian Sea
North Sea
The Norwegian licensing round
Announcement Application Award
Negotiation
AnnouncementNomination
NPD performs own evaluations of nominated areas. This forms
an important basis for the evaluation of applications.
The Norwegian licensing round
The application The blocks applied for
Priority Participating interest Operatorship ? Exploration work obligation Duration of initial period and extension period
Geological evaluation of the blocks applied for
Technical and economic evaluation of the blocks
Company information Company structure Technical expertise Safety and working environment issues
The Norwegian licensing round
Announcement Application Award
Negotiation
AnnouncementNomination
NPD performs own evaluations of nominated areas. This forms
an important basis for the evaluation of applications.
The Norwegian licensing round
Negotiation issues Extent and content for the work commitment
Seismic Number of wells
Duration of the initial period Main rule: 6 (up to 10) years
Duration of the license period beyond the initial period Main rule: 30 years after the initial period
Extent and point of time for relinquishment Main rule: 50 % after the initial period
Geographical extent of the licence One block Several blocks Part of block Dependent on the structures
The Norwegian licensing round
Announcement Application Award
Negotiation
AnnouncementNomination
NPD performs own evaluations of nominated areas. This forms
an important basis for the evaluation of applications.
The Norwegian licensing round
Award criteria
Technical expertise
Financial strength
Geological understanding
Experience NCS or other similar areas Other activities
If group application: composition of the group, recommended operator and collective competence
The Norwegian licensing round
The Award – single application – pre 1999
The operator
The participating companies and their equity
The State Direct Financial Interest (SDFI)
Earlier: Statoil’s interest
JOINT OPERATION AGREEMENT ACCOUNTING AGREEMENT
The Norwegian licensing round
NPD’s role in the application process
Evaluation of the blocks and areas Mapping Prospect evaluation
Handling of the technical parts of the applications Review geological, technical and economic evaluations Consider companies’ technical expertise, resource management From PSA: safety record and working environment record
Rank companies according to award criteria
Consider appropriate exploration work obligations
Input to the award process in the Ministry
License terms
License period
Work commitments
Restrictions
Partial relinquishments
State participation
Shift of operatorship
Seismic acquisition
Drilling of wells
Contingent wells
Work commitment
SummarySummary
Exploration in phases
High authority control and participation in early phases
Discretionary system
Awards based on technical competence and financial strength
Work commitments