In order to keep up the discovery rate, and to keep production of oil and gas from a rapid decline, it is crucial that we gain access to new acreage. Per 31 December 2012 Det norske has ownership in 67 lincenses on the Norwegian Continental Shelf (NCS), of which we operate 26. Being the operator of a license means having the primary responsibility to seek out and pursue prospects of new oil and gas discoveries.
We seek new licenses and operatorships through the ordinary licensing rounds, as well as the Awards in Predefined Areas rounds (APA).
The licensing rounds are very important for Det norske, and the best way of gaining access to new acreage. Since 1965, the authorities have carried out 22 licensing rounds. This is an award of acreage in areas that have not yet been sufficiently explored. The licensing rounds are conducted every other year and consist of a nomination phase, a hearing phase and the announcement. The application area has not been changed for the last 15 years.
In addition, the Norwegian authorities introduced the APA rounds in 2003. These license rounds include new call for applications for returned acreage in mature areas of the Norwegian shelf. The APA rounds are usually held on an annual basis.
In the 2012 APA round, Det norske was awarded eight licenses, of which we will operate three.
See our licensemap here.
More on licenses
The production licenses are awarded to a commonality of interest, in which normally consists of several companies. The production license regulates each company’s rights and obligations towards the State. All partners in a license are jointly and severally responsible in fulfilling whatever obligations the production license assumes. Initially, the license is valid for a period of up to ten years. During this period, a pre-established work program will be completed in the form of geological and geophysical pre-studies and/or exploration drilling, plus environmental surveys in vulnerable areas.
When a production license has been awarded, the licensees must enter into a joint cooperation and accounting agreement, subject to conditions stipulated by the authorities. These agreements regulate many aspects of the relationship between the partners and the operator, and also the relationship with the authorities. The operator in each production license is appointed by the authorities, and this company is responsible for the day-to-day license operations.
The steering committee is the supreme authority in a production license. Each of the partners in the license is represented on the steering committee. The voting rules are normally designed so that a majority in terms of both interests and the number of votes is required for a decision to be valid. The way the voting rules work, an owner with an interest of more than 50 percent cannot adopt a proposal alone.
The licensees can buy, sell and swap license interests, but this is conditional on the approval of the Ministry of Petroleum and Energy, as well as by the Ministry of Finance in matters relating to tax.