White Paper) to the Storting 28 (2010–2011) Report Meld
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Meld. St. 28 (2010–2011) Report 28 (2010–2011) to the Storting (white paper) St. Meld. Meld. St. 28 (2010–2011) Report to the Storting (white paper) Published by: Norwegian Ministry of Petroleum and Energy An industry for the future – Norway´s petroleum activities Internet address: www.government.no Cover photo: Scanpix Printed by: 07 Aurskog AS 10/2011 ER JØM KE IL T M 2 4 9 1 7 3 Trykksak Meld. St. 28 (2010–2011) Report to the Storting (white paper) An industry for the future – Norway’s petroleum activities Translation from the Norwegian. For information only. Contents 1 Objective and summary ............ 5 3.2.1 Development in the gas market .... 47 1.1 Objective ......................................... 5 3.2.2 European gas demand ................... 48 1.2 International framework ............... 7 3.2.3 Gas supply in Europe ..................... 49 1.3 An industry for the future ............. 7 3.2.4 Gas prices ........................................ 50 1.4 Measures ........................................ 10 3.3 Summary ......................................... 50 1.4.1 Recovering proven resources ....... 10 1.4.2 Find more in open areas ............... 11 4 Recovery of proven resources .. 52 1.4.3 Management of unopened areas .. 11 4.1 Potential and technology to 1.4.4 Employment, spin-off effects and recover more ................................... 53 research .......................................... 12 4.1.1 Potential from higher recovery 1.4.5 Opportunities in the north ............ 13 rate ................................................... 53 1.4.6 Revenues to the state ..................... 14 4.1.2 Solutions that could improve the 1.4.7 The external environment, recovery rate ................................... 55 emergency preparedness and 4.2 Measures – the legal framework .. 58 safety ............................................... 15 4.2.1 Voting rules ..................................... 58 4.2.2 Predictable extension of license 2 The Norwegian Shelf in period for production licenses ...... 59 change ............................................ 16 4.2.3 Follow-up of late-phase fields ........ 61 2.1 The resource base ......................... 17 4.3 Measures – cost level and 2.2 Activity level ................................... 20 profitability ...................................... 61 2.2.1 Production ...................................... 20 4.3.1 Drilling and wells ........................... 61 2.2.2 Exploration activity ........................ 21 4.3.2 Coordination ................................... 63 2.2.3 Investment and employment ........ 22 4.3.3 Cost/benefit analyses in the 2.2.4 Revenues to the State .................... 23 event of new regulations/stricter 2.3 Discharges to sea and emissions practice ............................................ 64 to air ................................................ 24 4.3.4 Joint effort to reduce operating 2.4 Cost level and profitability ............ 25 costs ................................................. 64 2.5 Diversity of players ........................ 27 4.4 Measures – player composition 2.5.1 The exploration phase ................... 28 and competition situation .............. 65 2.5.2 The development phase ................ 29 4.4.1 Petoro and SDFI ............................. 65 2.5.3 The operations phase .................... 30 4.4.2 Tax treatment of exploration 2.5.4 The supply industry ....................... 33 costs ................................................. 66 2.6 Opportunities in the various parts 4.5 Measures – technology of the continental shelf .................. 34 development ................................... 66 2.6.1 The southern part of the 4.6 Infrastructure – use and further North Sea ........................................ 34 development ................................... 67 2.6.2 The central part of the 4.6.1 The Norwegian gas transport North Sea ........................................ 36 system – organisation and 2.6.3 The northern part of the regulation ........................................ 67 North Sea ........................................ 37 4.6.2 Third-party use of facilities ............ 71 2.6.4 The Norwegian Sea ....................... 38 4.7 Development of discoveries .......... 72 2.6.5 The Barents Sea ............................. 40 4.7.1 Discoveries approaching a development decision ................. 72 3 Oil and gas prices support 4.7.2 Other discoveries ........................... 73 profitable activity ........................ 42 4.7.3 Profitability for small discoveries 3.1 The oil market ................................ 42 – standardisation ............................ 74 3.1.1 Development trends ...................... 42 4.7.4 Naming petroleum deposits .......... 75 3.1.2 Demand .......................................... 43 4.7.5 Ownership and taxation of 3.1.3 Supply .............................................. 44 facilities ........................................... 76 3.1.4 Oil price .......................................... 46 4.7.6 Development of discoveries 3.2 Gas markets .................................... 47 results in spin-off effects ................ 76 5 Discovering more in opened 7.6 Disposal ........................................... 133 areas ............................................... 79 5.1 Undiscovered resources in 8 Employment, spin-off effects opened areas .................................. 80 and research ................................ 134 5.2 Exploration activity within 8.1 Shelf and shore ............................... 135 comprehensive marine 8.2 The petroleum activity employs management ................................... 81 many people .................................... 137 5.2.1 Integrated management plans 8.2.1 The supply industry location ......... 138 and exploration policy ................... 81 8.3 Development of the industry ......... 139 5.2.2 Coordination with the fishery 8.3.1 Industrial experience and culture .. 139 industry ........................................... 83 8.3.2 Expertise ......................................... 140 5.3 Exploration policy .......................... 85 8.3.3 Regional development ................... 142 5.3.1 Mature areas – APA ....................... 86 8.4 Great possibilities in the north ..... 143 5.3.2 Frontier areas – numbered 8.4.1 Spin-off effects from rounds ............................................. 90 developments .................................. 144 5.4 New and different types of 8.4.2 Future developments ..................... 145 companies ....................................... 93 8.4.3 Analysis of spin-off effects in the 5.4.1 Requirements for companies and region ............................................... 146 prequalification ............................... 93 8.4.4 Challenges associated with 5.4.2 New players contribute to more increased spin-off effects ............... 147 exploration ...................................... 95 8.5 International success for the 5.5 Exploration is profitable ................ 97 industry ........................................... 150 8.5.1 INTSOK ........................................... 151 6 Management of unopened 8.5.2 Northern Russia – a new areas ............................................... 98 opportunity for Norwegian 6.1 Timely opening of new area .......... 99 business and industry .................... 152 6.2 Area overview ................................. 99 8.6 Industrial use of gas in Norway – 6.3 Opening history ............................. 99 framework and possibilities .......... 152 6.4 The unopened areas ...................... 101 8.6.1 Natural gas liquids (NGLs) ........... 153 6.4.1 Sea areas near Jan Mayen ............. 101 8.6.2 Dry gas ............................................ 154 6.4.2 The Norwegian Sea ....................... 105 8.6.3 Assessments ................................... 154 6.4.3 Barents Sea South .......................... 108 8.7 Technology, research and 6.4.4 The Barents Sea North and Arctic expertise .......................................... 155 Ocean .............................................. 110 8.7.1 Priorities within research and 6.4.5 The North Sea and Skagerrak ...... 112 development ................................... 157 6.4.6 Elements in an opening process .. 112 8.7.2 Incentives and financing of research and development ............ 159 7 The external environment, 8.7.3 Organisation of the public preparedness and safety .......... 114 petroleum research ........................ 160 7.1 Comprehensive and modern 8.7.4 Expertise and recruitment of regulation ........................................ 115 labour ............................................... 161 7.2 Operational discharges to sea ...... 116 7.2.1 Policy instruments designed to 9 State revenues ............................. 163 reduce regular discharges to sea . 118 9.1 EITI .................................................. 164 7.3 Emissions to air .............................. 119 9.2 The petroleum tax system ............. 164 7.3.1 Policy instruments for reducing 9.3 Fees ................................................. 165 emissions to air .............................. 121 9.4 Dividend from Statoil ASA ............. 165 7.3.2 Climate Cure 2020 ......................... 123 9.5 The State’s Direct Financial 7.3.3 Power from shore .......................... 124 Interest ............................................ 166 7.4 Acute discharges to sea ...............