Resources is a general term for all oil and gas that can be recovered. The resources are classified according to maturity, which measures how far along they are in the planning process leading up to production. The primary classifications are reserves, contingent resources and unproven resources.
The basic estimate in the Resource Accounts shows that the total proven and unproven petroleum resources on the Norwegian shelf is about 15.8 billion standard cubic metres of oil equivalents (Sm3 o.e.). This is 28 million Sm3 o.e. more than as of 31 December 2019. Forty-nine per cent of the resources, or 7.8 billion Sm3 o.e., have been sold and delivered.
The NPD estimates that 8 billion Sm3 o.e. are left to be produced. Of this, 4.2 billion Sm3 o.e., or 52 per cent, are proven resources.
The estimate for undiscovered resources is 3.8 billion Sm3 o.e. The estimate has been reduced by 75 million Sm3 o.e. due to the fact that equivalent volumes were proven through exploration in 2020.
Original recoverable petroleum resources on the Norwegian continental shelf as of 31.12.2020
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 that are not yet produced, but where a decision to produce 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 amounted to 2727 million Sm3 o.e. Fifty-three per cent of this is gas. Gross reserves, or the estimate before deducting production, increased by 53 million Sm3 o.e. compared with the previous year.
Production in 2020 amounted to 229 million Sm3 o.e. The change in the accounts is 226 million Sm3 o.e. This is a technical accounting-data change which results in a net reduction in reserves of 173 million Sm3 o.e., or about 6 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. The growth in the contingent resources category comes both from new discoveries, changed resource estimates and new opportunities in fields and discoveries. Decisions are made every year to develop some of the contingent resources, at which point they are moved to the reserves category.
At the end of the year, the contingent resources amounted to1428 million Sm3 o.e. This corresponds to 34 per cent of the remaining proven resources. Resources considered not to be commercially recoverable, are not included in the accounts.
A total of 34 wildcat wells were completed in 2020, and 15 discoveries were made: seven in the Norwegian Sea and eight in the North Sea. Recoverable resources from these discoveries are presumed by the NPD to be 76 million Sm3 o.e. However, evaluations are not complete for several of the discoveries, and the estimates are therefore very uncertain. One of the discoveries in 2020 is assessed as an unlikely candidate for development and is not included in the accounts.
Resources in discoveries have increased by 3 million Sm3 o.e., to 705 million Sm3 o.e., and account for 17 per cent of the remaining proven resources. The change is small and is due to a combination of several factors. Growth from new discoveries in 2020 has been good, while at the same time, 14 of the discoveries in last year’s accounts are now assessed as unlikely candidates for development and have thus been removed from this year’s accounts. Other changes come from submitted development plans and adjusted estimates for several discoveries.
Contingent resources in fields account for 723 million Sm3 o.e., or 17 per cent of the remaining proven resources. Of the contingent resources, 265 million Sm3 o.e. are resources from potential measures in fields (RK 7A) and are not included in the tables for the respective ocean areas. In 2020, the contingent resources in fields increased by 46 million Sm3 o.e. compared with the accounts in 2019. This increase can be explained by the fact that multiple fields have identified potential measures to improve recovery, for example by drilling more wells or extending facility lifetime and thereby extending the production period.
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 an update is undertaken every other year, and the next update will be in 2021.
The undiscovered resources are adjusted to reflect the annual exploration results. The estimate in this year’s resource accounts is 3835 million Sm3 o.e., which is a reduction of 75 million Sm3 o.e. compared with last year’s accounts. Undiscovered resources constitute about 48 per cent of the overall remaining resources on the Norwegian shelf.