RYSTAD ENERGY PRODUCT HIGHLIGHTS • NCSAtlas: provides monthly up-to-date information on licenses and field activities on the Norwegian Continental Shelf, including area-by-area reviews, exploration drilling activity, reserves/resources benchmarks, production profile outlooks and monthly feature topics (e.g. asset transaction).
NCSAtlas Insights May 2015 • APA area expansion • MOL - Ithaca transaction
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Key NCS Takeaways May 2015
Maria Plan for Development and Production (PDO) in the Norwegian Sea submitted May 5. Oil discovery of about 180 MMboe and investments of NOK 15.3 billion (USD 2.0 billion). Investments reduced NOK 2,2 billion or 13% compared to Environmental Impact Assessment, a sign of cost compression on the NCS. First operated development by Wintershall (50%) involving agreements with Kirstin (processing), Åsgard (oil storage and transportation), Tyrihans (gas lift) and Heidrun (water injection). Partners are Petoro (30%) and Centrica (20%).
Awards in predefined areas (APA) 2015 announced. 35 blocks in the Norwegian Sea (including Aasta Hansteen area) and 11 blocks in the Barents Sea (including Alta/Gohta area). After first APA 2004 (101 thousand square km) acreage has doubled to 221 thousand square km. See more details and analysis for APA in this month’s insight.
Johan Castberg development in the Barents Sea might see tax reliefs for concept with onshore facilities. Government to discuss with EFTA Surveillance Authority (ESA). For Snøhvit development tax change with depreciation over three years instead of six years was introduced (no indication that the same will apply for Castberg).
Ithaca Norway acquired by MOL for an initial payment of USD 60 million including net cash of USD 30 million. Contingent payment of up to USD 30 million depending on exploration success. Ithaca acquired Valiant Petroleum in Norway 2013 and the portfolio now consists of 20 exploration licenses (according to NPD), three committed wells 2015-2016 and net unrisked volumes of 600 mmboe. MOL is a listed, international integrated oil and gas company from Hungary. Biggest owner is Hungarian state with 25%.
Barents Sea exploration cooperation with Statoil, Eni, Lundin, OMV and GDF Suez announced. “Goal is to increase coordination and develop cost-effective solutions for exploration in the Barents Sea” and includes logistics and drilling units (among others).