Three North Sea operators took steps towards increasing their Norwegian output of oil and gas this week, as part of a picture where Western Europe’s biggest hydrocarbon-producing nation strives to respond to higher demand from a continent deprived of much of the Russian energy it used to receive.

London-based Neptune Energy announced a small discovery with the Calypso exploration well in the Norwegian Sea on 2 December, with preliminary estimates indicating recoverable oil of between 6 million and 22 million barrels of oil equivalent.

The Calypso discovery is located within on Production Licence 938, one of Neptune’s core areas, 14 kilometres northwest of the Draugen field and 22 kilometres northeast of the Njord A platform.

The well was drilled by the Deepsea Yantai, a semi-submersible rig owned by CIMC and operated by Odfjell Drilling.

Neptune’s Norway and UK managing director Odin Estensen said: “We actively explore in areas close to existing infrastructure. These near-field discoveries allow for low-cost and low-carbon developments.”

Green light

Also on 2 December, Norway’s Aker BP said its board had given the nod to plans to go ahead with several new oil and gas field development plans between 2023 and 2028.

The board decision confirmed Aker BP will vote in favour of submitting a plan for development and operation for the Noaka field project, as well as Valhall PWP-Fenris, Skarv Satellite, and Utsira High.

Aker BP took over discoveries in the Noaka area earlier in this year, following a transaction with former operator Equinor.

Final partner approvals to submit the PDOs are expected to take place in the respective licences during the first half of December, after which the plans will be submitted to Norwegian authorities, according to the statement.

Aker BP said oil and gas resources on these projects, net to the company, are estimated at 730 million boe.

The statement said the approvals covered the company’s share of investments in projects requiring a total $19 billion in capital expenditure, according to a statement filed with the Oslo Stock Exchange.

The project was assessed on the basis of a corresponding average break-even oil price estimated at $35 to $40 per barrel, calculated with a 10% discount rate and accounting for announced changes to the Norwegian Petroleum Tax.

Equinor’s gas boost

Also in the North Sea, Equinor’s plans to invest in boosting natural gas output and reducing carbon dioxide emissions from the Oseberg field were approved by Norway’s Ministry of Petroleum & Energy on 1 December.

Equinor and its partners submitted an amended application in the Oseberg licence for development and operation of the field in November 2021, outlining plans to increase recoverable reserves on the field by 54%.

Under the planned upgrade, two new compressors will be installed on the Oseberg central platform, while reduction on emissions will be achieved by a partial electrification of the production infrastructure.

Norway’s Minister of Petroleum & Energy, Terje Aasland (left), presented the application approval to Oseberg project manager Arild Gjerstad (right) at an event on 1 December. Photo: SVERRE KOJEDAL/EQUINOR

“The production of highly sought-after gas from Oseberg can be maintained at the current high level for several years, since we’ll be recovering more of the gas,” said Trond Bokn, Equinor’s senior vice president for project management control.

“At the same time, we'll be reducing CO2 emissions by about 320,000 tonnes per year.”

Oseberg is expected to produce 100 billion cubic metres of gas between 2022 and 2040.

The start-up of “revamped” Oseberg is scheduled for 2026.

Tax deadline

The Norwegian government will effectively increase taxation on oil and gas companies’ operations on the Norwegian continental shelf as of 2023, when a sizeable tax deduction granted to support Norway’s key industry during Covid lockdowns will come to an end.

The proposed changes to temporary tax rules for the petroleum sector would reduce the uplift rate — special tax deduction — from 17.69% to 12.4% and increase state revenues by an estimated Nkr2 billion ($191 million) in 2023.

In a parallel move, Norwegian defence forces are to receive an annual budget boost of Nkr6.8 billion, as the government looks to increase security around critical energy installations, following a flurry of unidentified drone sightings offshore Norway and sabotage act on the Nord Stream pipeline between Russia and Germany.

Norway is on track to earn €120 billion ($126 billion) on oil and gas sale this year, a fourfold increase on last year, Prime Minister Jonas Gahr Store confirmed to German news outlet Sueddeutsche Zeitung earlier this week.

Norway expects to deliver 122 Bcm natural gas to Europe this year, an increase of 8% on 2021, data compiled from the Norwegian government showed.

Stay a step ahead with the Upstream News app
Read high quality news and insight on the oil and gas business and its energy transition on-the-go. The News app offers you more control over your Upstream reading experience than any other platform.