Var Energi Scores First Drilling Permit in Norway in 2024

The Norwegian Offshore Directorate has announced the first drilling permit of the year, as it forecast sustained hydrocarbon activity in Norwegian waters.

Var Energi ASA has been cleared to drill wildcat well 25/8-23 S, an asset under production license (PL) 956, the regulator, formerly the Norwegian Petroleum Directorate, said in a press release.

The exploration task will be conducted by Odfjell Drilling AS’ semisub steel rig Deepsea Yantais, according to the brief announcement. No timeline for completion has been provided.

In 2022 Var Energi gave up a portion of its equity in PL956, as well as PL985, in its purchase of stakes in PLs 917 and 917B, which sit west of the Balder field, from Lundin Energy Norway AS, now part of Aker BP ASA. The agreement with Lundin “provides Var Energi with the operatorship and 20 percent additional equity share [in PLs 917 and 917B] in return for reduced equity in PLs 956 and 985”, Var Energi said in a news release August 15, 2022.

Var Energi holds a 20 percent operated interest in PL956.

While a new well is set for drilling, the directorate announced earlier this month Equinor ASA’s exploration well 30/4-4, also in the North Sea, turned up dry. The first drilling project under the Equinor-operated PL043FS, the well was drilled seven kilometers (4.35 miles) north of the Martin Linge field and 180 kilometers (111.85 miles) west of Bergen.

The directorate declared the prospect dry despite the result showing 114 meters (374.02 feet) of Paleocene-epoch Hermod sandstones “with very good reservoir quality”.

“The well will be permanently plugged and abandoned”, it said in a media release January 11.

‘High Activity’

The directorate expects “high activity” that was seen 2023 on the Norwegian continental shelf to continue this year. Ninety-two fields were in operation and 27 projects were under development as of December, the directorate said in a press release January 11.

On January 9 the Norwegian parliament endorsed the government’s proposal to open parts of Norwegian waters for mineral exploitation.

“Preliminary figures for December indicate a new export record for a single month, with just under 12 billion standard cubic meters [423.78 billion cubic feet] gas”, the directorate said.

“The Norwegian shelf will continue to play an extremely important role for energy security in Europe for many years to come”, it added.

The Nordic country had been Europe’s number two source of natural gas next to Russia before Russia invaded Ukraine February 2022. Amid trade sanctions against the Putin regime over the war, Norway overtook Russia as the EU’s top natural gas exporter that year. Norway accounted for 24.4 percent of the region’s imports 2022, compared to 15.3 percent from Russia, according to a bulletin update May 3, 2023, by the European Union statistics agency Eurostat.

“As a consequence of high development activity, oil and gas production is expected to remain stable for the next few years”, the directorate said. “Over the short term, the new fields coming on stream will offset lower production from aging fields.

“Compared with forecasts presented in The Shelf last year, we see a relatively large increase in investments for 2023 and 2024. This is a result of factors such as high activity levels in the industry, a weaker Norwegian currency and cost growth. Certain projects have accelerated investments and several fields have gained extended lifetimes and must therefore invest in upgrades”.

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