Bud's Offshore Energy (BOE)

In announcing its annual licensing round, Norway expresses strong support for offshore exploration and production:

The oil and gas industry is crucial for Norway and for Europe. The government is today announcing new exploration areas in the APA (Allocations in Predefined Areas) to further develop the petroleum sector, so that it can continue to create great value for the community, lay the foundation for good jobs throughout the country, ensure our common welfare and contribute to Europe’s energy security and safety, says Prime Minister Jonas Gahr Støre.

Kudos to Norway for the strong, unequivocal announcement. Consistent acreage offerings are important in sustaining offshore production:

Allocations in Predefined Areas (APA) are an annual licensing round that covers the best-known exploration areas on the continental shelf. Through the APA scheme, oil companies gain predictability regarding access to exploration acreage, which is important for a long-term industry such as the petroleum industry. After more than 50 years of exploration activity, the APA scheme today covers the majority of the area that is opened and available on the Norwegian continental shelf.

This is what it takes to sustain oil production at about 2 million barrels/day and gas production at over 10 billion cu ft/day.

Norway also has an exemplary risk and performance-based regulatory regime administered by Havtil.

Perhaps less pragmatic, in the opinion of this observer, are these policies:

• Electrification of distant offshore platforms: Given the reliability, cost, and cable vulnerability concerns, Equinor has wisely scratched some of their electrification plans.
• Carbon sequestration (disposal) projects: high cost, added risk, questionable benefits (hopeful that the Gulf of America carbon disposal era will end before it begins)