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ENERGY NEWS
Europe Energy Review By Tsvetana Paraskova
Another record in European natural gas prices, acreage awards and development plans on the Norwegian shelf, and the results of the major offshore wind auction in Scotland were the key themes in Europe’s energy in the past month.
Oil & Gas Natural gas prices in Europe surged to a fresh record-high at the end of 2021, and continued to be volatile at the start of 2022, driven in opposite directions by an influx of LNG cargoes and persistently low Russian supply. At the same time, major gas and LNG traders such as Shell said they would benefit from the high prices. Shell expects its trading and optimisation results in the Integrated Gas division to be significantly higher compared to the third quarter 2021. However, Shell’s Oil Products Trading and optimisation results are expected to be significantly lower than the third quarter 2021. Norway offered in January 53 new production licences on the Norwegian continental shelf in the licensing round APA 2021—the annual exploration round in the most mature areas on the Norwegian shelf. The 53 production licenses include 28 in the North Sea, 20 in the Norwegian Sea, and five in the Barents Sea. A total of 28 different oil companies, from large international companies to smaller Norwegian exploration companies, were offered shares in one or more of these licenses, while 15 companies were offered one or more operatorships. “This award is an important contribution to maintain future exploration activity and
www.ogv.energy I February 2022
to make new, profitable discoveries,” said Minister of Petroleum and Energy Marte Mjøs Persen. Equinor was awarded 26 new production licences, 12 licences as operator and 14 licences as partner. “We continue an active exploration strategy but focus on maximising value creation overgrowth and volume. At least 80 per cent of our exploration resources and investments will be concentrated around existing infrastructure – so-called near-field or infrastructure-led exploration,” said Jez Averty, Equinor’s senior vice president for subsurface in Exploration & Production Norway. Norway reaped record-high revenues from its oil and gas resources last year, the Norwegian Petroleum Directorate said in its annual overview of activity on the shelf. “The combination of high production of oil and gas from a total of 94 fields, significant demand and high commodity prices led to a historically high level on the State's export revenues from petroleum. Much of this is due to record-high gas prices,” the directorate said. Production in 2021 was around 4 million barrels of oil equivalent per day (boepd), slightly up from 2020.
Five fields started production in 2021 – Duva, Yme (older field which was restarted), Solveig, Martin Linge in the North Sea, and Ærfugl in the northern Norwegian Sea. Eight development plans (PDOs) were submitted in 2021, and companies are expected to submit dozens of PDOs this year, the directorate said. Lundin Energy AB and AkerBP have reached an agreement under which AkerBP would buy the oil and gas business of Lundin Energy, through a statutory merger, to create a leading European independent E&P company. bp, which currently holds a 27.9% interest in Aker BP, welcomed the proposed deal. “We welcome and support this proposed acquisition, which will strengthen and significantly enhance the long-term future of Aker BP and our continuing relationship with Aker,” bp chief executive Bernard Looney said. Equinor announced in early January it had discovered oil in the Troll and Fram area in exploration wells in the Toppand prospect. Preliminary calculations of the expected size indicate around 21–33 million barrels of recoverable oil equivalent. “We also regard this discovery to be commercially viable and will consider tying it to the Troll B or Troll C platform. Such discoveries close to existing infrastructure are characterised by high profitability, a short payback period and low CO2 emissions,” said Geir Sørtveit, senior vice president for exploration & production west operations. Neptune Energy announced in mid-January first gas production from its operated Adorf Z16 development well in the municipality of Hoogstede in north western Germany.
