Norway intends to significantly expand exploration acreage on offer to oil companies in the frontier Barents Sea under its latest offshore licensing round that would open up nine new areas for drilling.

A total of 136 blocks are planned to be offered in the country’s 25th acreage round, of which 125 lie in the Barents where eight new areas that have previously been inaccessible to explorers would be opened, with the remaining 11 blocks lying in an area of the Norwegian Sea.

The proposed round was opened up for consultation by the Petroleum & Energy Ministry on Wednesday, with a deadline for submissions of 26 August this year that could result in a revision of available blocks and licence awards scheduled in the first half of 2021.

“A steady supply of new acreage is crucial in order to maintain activity on Norway’s continental shelf,” Petroleum & Energy Minister Tina Bru said.

Belief in Barents

“We need new discoveries to maintain employment and value creation in the future. I have a firm belief that the opportunities now on offer in the Barents and Norwegian seas will be attractive for companies and will contribute to increased value creation and activity in the north in the longer term.”

It comes amid exploration cutbacks by oil companies in the wake of the Covid-19 pandemic and subsequent collapse in oil prices due to global energy demand destruction that have seen more than 10 wildcats postponed off Norway, including a number in the Barents Sea.

These include a proposed probe at the Aker BP-operated Stangestind prospect in the south-east Barents that was seen as targeting the last remaining big structure with hydrocarbon potential in this area after Equinor’s earlier failed drilling efforts at the Korpfjell and Gjokaasen prospects.

Exploration appetite in the Arctic region has waned following disappointing drilling results, with state-controlled Equinor refocusing its prospecting strategy on so-called infrastructure-led exploration to tap finds economically using existing facilities in relatively mature areas, especially in the light of lower oil prices.

The government is therefore seeking to push exploration in the Barents region off Norway, where there are presently only two producing fields — Equinor’s Snohvit and Vaar Energi’s Goliat — with Equinor’s Johan Castberg field also currently under development.

Fiscal relief

Tax relief measures recently announced by the government could also turn the development wheels on Equinor’s Wisting project, while Lundin Energy is continuing to evaluate a possible development of its Alta-Gohta discoveries.

The launch of the latest biennial licensing round was postponed pending political discussions over the resource management plan for the Barents to determine the extent to which drilling could be permitted northwards in relation to the disputed ice boundary.

A compromise reached earlier this year will allow room for a significant number of new exploration licences to be issued in the region in the face of environmental pressure to halt drilling in the region, mainly from Greenpeace.

The green group has previously sought to overturn Barents block awards in the earlier 23rd round through a legal action in which it claimed these violated Norway’s constitutional right to ensure a sustainable environment for future generations, but its case and a subsequent appeal were defeated.

Green challenge

Greenpeace intends to file a further appeal against the decision in the country’s Supreme Court, with a hearing scheduled for 4 November.

The group has also criticised the parliamentary compromise over the ice edge zone that defines the latter as areas with more than a 15% concentration of ice, contrary to scientific recommendations that it should cover areas with an ice frequency of between 0.5% and 30%.

The latter definition would have move the ice edge southwards and encompassed eight awarded oil licences, of which three are at issue in the ongoing court case.

Head of Greenpeace Norway, Frode Pleym, said the government, backed by opposition parties, had “put the interests of the oil industry before scientific advice”, claiming it was jeopardising the energy transition aimed at cutting carbon dioxide emissions.

However, the oil-friendly Progress Party wants to see the ice boundary pushed even farther northwards, with the contentious issue up for discussion again in 2023.

Exploration

Norway to boost Barents acreage in fresh blocks offering