R
ecent discoveries on the Norwegian Continental Shelf,
such as Johan Sverdrup in the North Sea, and
Johan Castberg, Gotha and Alta in the Barents Sea,
have boosted exploration activity, both in previously explored
and new frontier areas. The attractive exploration tax regime
has encouraged more companies to enter the region, including
the super‑majors who are active in the Barents Sea, especially
in the previously disputed areas bordering Russia.
The high energy prices prevailing until last year also led
to a rise in activity in the Norwegian petroleum industry,
with upgrading of older fields in addition to exploration for
potential discoveries on new plays. However, the level of
costs also rose substantially – a development shared with
other petroleum provinces, reflecting the fact that oil and
gas are being produced in ever more demanding areas. The
recent sharp fall in the oil price, combined with a number
of cost overruns, has contributed to reducing the financial
robustness of a number of potential field developments and
caused the postponement of the development of Johan
Castberg. Nevertheless, investment and activity on the
Norwegian Continental Shelf (NCS) are expected to remain at
historically high levels, although some players are showing
interest in divesting assets to optimise their project portfolio
according to the new reality.
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