Resources is a general term for all oil and gas that can be recovered. Resources are classified according to maturity, which measures how far along they are in the planning process leading to production. The primary classifications are reserves, contingent resources and undiscovered resources.
The Norwegian Petroleum Directorate's (NPD's) basic estimate of total proven and unproven petroleum resources is about 15.7 billion standard cubic metres of oil equivalents (Sm3 o.e.). Of this, 7.6 billion Sm3 o.e., or 48 per cent, has been sold and delivered. The estimate for undiscovered resources is 3.9 billion Sm3 o.e. The resource estimate for undiscovered resources was updated in 2019. The estimate was reduced by 30 million Sm3 o.e. compared with the accounts in 2018.
The NPD estimates that 8.2 billion Sm3 o.e. are left to produce. Of this, 4.3 billion Sm3 o.e. are proven resources.
Original recoverable petroleum resources on the Norwegian continental shelf as of 31.12.2019
Oil and condensate are quoted in million standard cubic metres (Sm³). NGL is quoted in million tonnes, and gas is quoted in billion standard cubic metres. The conversion factor for NGL in tonnes to Sm³ is 1.9. Total oil equivalents are stated in million Sm³ o.e., 1000 Sm³ gas = 1 Sm³ o.e.
Source: Norwegian Petroleum Directorate
The production (well stream) from different reservoirs contains oil, gas and water in various combinations. To get marketable products, the production from the reservoirs must be separated and treated. The production from different reservoirs varies from oil with low gas content to almost dry gas (methane with only small amounts of other gases).
Crude oil is a fluid that is a combination of different types of hydrocarbons. The composition varies from field to field, and the quality of the oil, including how light or heavy (viscous) the oil is, depends on the composition of the hydrocarbons as well as the contents of other substances, such as wax and sulphur.
Rich gas, or crude natural gas, is a mixture of various gases. When necessary, the gas is separated from the oil before the rich gas is treated in a processing facility that separates the dry and wet gas components. Dry gas is often referred to as natural gas, and consists mainly of methane, but also a little ethane.
Wet gas, or NGL (Natural Gas Liquids), consists of a mixture of heavier gases (ethane, propane, butanes and naphtha). In addition there are heavier condensates which some classify as a separate product. Naphtha and condensate are liquid at room temperature, while the lighter wet gas components can be made liquid either by cooling or adding pressure.
Not all gas that is produced is sold. Some of the gas is used to generate power on the fields, and small amounts are flared for safety purposes. On some fields, gas is reinjected into the reservoirs. Reinjection is often used to maintain reservoir pressure and displace the oil. This results in efficient recovery of the oil, and the gas is stored for possible recovery in the future.
Reserves are recoverable petroleum volumes not yet produced, but for which a production decision has been made. This includes both resources where the authorities have approved a plan for development and operation (PDO) and resources that the licensees (the companies in the production licence) have decided to produce, but still need to acquire the necessary permits from the authorities.
At the end of the year, reserves totaled 2900 million Sm3 o.e. Fifty-three per cent of this is gas. Gross reserves, or the estimate before deducting production, increased by 123 million Sm3 o.e. compared with the previous year. The reason for this solid increase is reserve growth in several producing fields, submission of a PDO for the "Balder Future" project and the plan to redevelop the Tor field. Production in 2019 totaled 216 million Sm3 o.e. The change in the accounts is 219 million Sm3 o.e. This is a technical accounting-data change which results in a net reduction in reserves of 96 million Sm3 o.e., or about 3 per cent.
Contingent resources are proven oil and gas for which a production decision has not yet been made. Petroleum volumes in potential improved recovery projects are included in this category. At the end of the year, contingent resources totaled 1378 million Sm3 o.e. This constitutes 32 per cent of the remaining proven resources. Resources considered not to be commercially recoverable, are not included in the accounts.
Decisions are made every year to develop some of the contingent resources, at which point they are moved to the reserves category. The growth in the contingent resources category comes from both new discoveries, changed resource estimates and new opportunities in fields and discoveries.
Forty-two wildcat wells were completed in 2019, and seventeen discoveries were made: one in the Barents Sea, six in the Norwegian Sea and ten in the North Sea. The total estimate for discoveries the NPD presumes could/will be developed is 70 million Sm3 o.e. Many of the discoveries are still being evaluated, and the estimates are therefore highly uncertain. Three of the discoveries in 2019 are assessed as unlikely candidates for development; these resources are not included in the accounts.
Resources in discoveries have increased by 43 million Sm3 o.e., to 702 million Sm3 o.e. and constitute 16 per cent of the remaining proven resources. The increase is mostly due to 14 new discoveries in 2019. Work is also under way on several discoveries, which can lead to changes in projections and classification. Seven discoveries from last year's accounts are now considered less likely candidates for development while five discoveries have an increased likelihood of development. Duva and Solveig have also been moved to the field portfolio following approval of PDOs.
Contingent resources in fields amount to 676 million Sm3 o.e., or 16 per cent of the remaining proven resources. Of the contingent resources, 230 million Sm3 are potential measures in fields (RC 7A); they are not included in the tables for the respective ocean areas. In 2019, contingent resources in fields were reduced by 31 million Sm3 o.e. compared with the accounts in 2018. This reduction can mostly be explained by submission of the PDO for the "Balder Future" project and a redevelopment of the Tor field.
Undiscovered resources cover oil and gas that will most likely be discovered and can be produced, but which have yet to be proven through drilling.
The resource estimate for the undiscovered resources was updated in 2019. Such updates are carried out every two years and the next update will be in 2021. The undiscovered resources are estimated at 3910 million Sm3 o.e. This is a reduction of 30 million Sm3 o.e. compared with the resource accounts for 2018. Undiscovered resources constitute about 48 per cent of the overall remaining resources on the Norwegian shelf.