20 years of offshore exploration yields plethora of valuable discoveries with abundant remaining potential, Norwegian Offshore Directorate reports

(WO) – A Norwegian Offshore Directorate analysis of exploration activity over the last 20 years (2004-2023) shows that the discoveries are valued at three times the costs expended.

The Norwegian Offshore Directorate has calculated the overall net cash flow for exploration activity during the 2004-2023 period at about NOK 3800 billion ($362.5 billion). In current value, this amounts to more than NOK 2000 billion ($190.8 billion). 

All exploration investments from this period have already been repaid by the discoveries that have come on stream. About 50 of 190 offshore discoveries have been developed and are producing. This means that around three-quarters of the resources discovered during these years have yet to be produced. These investments will remain profitable as more fields come on stream.

Exploration over time is necessary. Large discoveries contribute the most to value creation but are also crucial for establishing new infrastructure in new areas that makes it possible to develop smaller discoveries. Together, large numbers of small discoveries have created substantial values.

Between 2004 and 2023, about NOK 660 billion has been invested in exploring for oil and gas on the Norwegian Continental Shelf (NCS). This has resulted in more than 300 discoveries, the sum of which constitutes a resource growth of about 1800 million Sm3 of o.e. Production has been deemed unlikely for 110 of these discoveries. This means that 190 of the discoveries correspond to just under 1600 million Sm3 of o.e.

Substantial resources left on the NCS. Exploration activity has been profitable in all ocean areas. Over the last five years, the value of the discoveries made is more than twice the exploration costs.

Several of these discoveries are highly profitable, because they can be tied back to existing infrastructure at the right time. Discoveries in the Troll area in the North Sea are particularly good examples of this.

Norway still has extensive oil and gas resources on the NCS. These resources can provide a basis for production, export and value creation for society for many years to come.

 Such development will require continued exploration and additional investment in fields, discoveries and infrastructure. Failure to invest could lead to rapid dismantling of the petroleum activities.

Lead image: Troll B platform offshore Norway (Source: Equinor)