The shelf 2010 – Undiscovered resources
13/01/2011 The volume of estimated, undiscovered resources on the Norwegian continental shelf has been reduced from 3.3 to 2.6 billion standard cubic metres of oil equivalents (Sm3 o.e.). The largest reduction can be explained by discoveries totalling 400 million Sm3 o.e. since 2006. In addition, estimates have been written down following disappointing exploration results in several important play models, and following new surveys off Lofoten, Vesterålen and Senja.
The Norwegian Petroleum Directorate has carried out a new analysis of the undiscovered resources on the Norwegian shelf. The resource estimates include calculating the volume of recoverable petroleum resources that can be found in an area, if exploration is conducted on all prospects throughout the entire area. The volume that is actually proven and produced depends on both economic and technical factors.
Disappointing drilling results in several of the important play models in the deep water areas of the Norwegian Sea are one of the main reasons for the lower resource estimate. In addition, the Norwegian Petroleum Directorate’s surveys off Lofoten, Vesterålen and Senja suggest lower prospectivity than previously assumed.
Discoveries totalling 400 Sm3 made in the last four years are also deducted from the undiscovered resources.
The Norwegian Petroleum Directorate has updated its estimate of undiscovered petroleum resources for the entire Norwegian continental shelf. The previous update was conducted in 2006 and published in the 2007 Resource Report. The NPD has subsequently published new estimates for the Barents Sea (the 2009 Resource Report) and for the areas off Lofoten, Vesterålen and Senja (April 2010).
In the North Sea, expected undiscovered liquid estimates have been reduced from 675 to 565 million Sm3 o.e, while the expected gas volume has been reduced from 500 to 280 billion Sm3 o.e.
In the Norwegian Sea, the expected undiscovered liquid estimate has been reduced from 370 to 325 million Sm3 o.e., while the expected gas volume has been reduced from 825 to 455 billion Sm3 o.e.
The estimate for the Barents Sea has basically remained unchanged since the 2009 Resource Report.
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The Norwegian Petroleum Directorate’s estimate of undiscovered resources has varied somewhat through the years. Until 2002, the expected statistical value rose because several new play models were defined and confirmed by discoveries. After 2002, estimates have been scaled back, mainly because discovery history showed that the estimates made prior to drilling were higher than the resources actually discovered, leading to lower expectations for a number of major play models. Disappointing drilling results in recent years have further reduced expectations.
All estimates of undiscovered resources are stated within a range of uncertainty. The Barents Sea has the greatest uncertainty as large parts of this area remain closed to exploration. Therefore, many of the play models are unconfirmed. The estimate lies in the range of 175 - 2460 Sm3 o.e.
The estimate in the Norwegian Sea is between 260 - 1580 Sm3 o.e. Exploration activity has been conducted in the North Sea for more than 40 years, leading to the smallest range of uncertainty – 470 - 1305 Sm3 o.e.
During the four years that have passed since the Norwegian Petroleum Directorate last updated its estimate of undiscovered resources in the North Sea and the Norwegian Sea, a number of discoveries have been made that have fulfilled expectations, both in terms of size and content. This is primarily true for well-explored play models in the North Sea and the Norwegian Sea, and the reduction in the estimated undiscovered resources in these models fits well with the discoveries made.
A number of dry wells have been drilled in other play models, and some discoveries have been made that were smaller than indicated by expectations in 2006. Here the estimate in the play models has been reduced based on the expectation of fewer and smaller prospects, both in the North Sea and in the Norwegian Sea.
The reduction is greatest for estimated gas resources in both the North Sea and the Norwegian Sea. For the Norwegian Sea, this is mainly due to gas discoveries that are significantly smaller than expected. As regards the North Sea, oil has been discovered in some play models were gas was expected.
The estimate of undiscovered resources is based on the Norwegian Petroleum Directorate’s knowledge about the prospects on the shelf. The NPD continuously receives prospect information and maps from the operating companies, and also carries out substantial mapping of prospects on its own. It is impossible to provide an exact confirmation of the resource volumes for each prospect. These volumes are stated in terms of expected figures and ranges of uncertainty.
History suggests that consistently higher volume estimates are reported for the prospects than the resources actually discovered. Therefore, the Norwegian Petroleum Directorate conducts extensive quality control work as regards prospect data to arrive at the most objective and realistic prospectivity possible. This work involves, not least, a thorough analysis of the size and content of the discoveries made on the shelf. The discovery history and the size of the discoveries over time provide an important indication of what the companies can expect to find in the future.
The Norwegian Petroleum Directorate uses a statistical play model analysis to calculate undiscovered resources. The Norwegian Petroleum Directorate has divided the subsurface of the Norwegian shelf into a number of geological play models. Data from 69 play models is included in the 2010 analysis.
Estimates of volume, likelihood of discovery and expectations regarding content of oil or gas from all of the mapped prospects are included in the analysis. In addition come expectations related to petroleum deposits in structures that have not yet been mapped.
It is important that we do not focus exclusively on the statistically estimated expected value. In the 2010 estimate, the Norwegian Petroleum Directorate has resumed the previous practice of stating the range of uncertainty within 90 per cent confidence, p95 as the low estimate and p5 as the high estimate. The range of uncertainty for undiscovered resources naturally decreases as we gain more knowledge. This is evident when we compare the three areas on the Norwegian shelf.