A new chapter is beginning in our home waters. The mammoth fields of the North Sea are dwindling, and the game is changing. Although we have the highest level of exploration at any time in our history, new oil finds are smaller, and scattered. They are also less accessible and more challenging to recover.
 
It’s a trend that’s changing the way we work — but in our business, change is the only constant. We have been adapting our technology and refining our methods ever since we started work on the Norwegian continental shelf, nearly four decades ago.
 
The quest for new resources is taking us to areas as yet undeveloped — deeper waters, harsher environments, complex reservoirs. As we move steadily northwards, we are crossing new frontiers for our industry: to storm-tossed and icy seas, and wells with high pressures and temperatures. As the largest operator in Norway by far, our innovation is driving development on the continental shelf as a whole.

Maintaining headway

The Norwegian continental shelf has always been challenging — geologically and environmentally. It has shaped us as a company, and given us a unique platform on which to build our future overseas. But the future of the NCS is by no means over. On the contrary, it’s the backbone of our operations and the cradle of our innovation. We intend to maintain production levels on the NCS for the next ten years. We know that’s an ambitious goal.
 
Last year, we set new records on levels of investment on the NCS. Many wells were drilled, and many discoveries were made. Activity will remain high in 2010. We have added 190,000 barrels in new production capacity since the merger alone.
 
At the same time, natural gas is increasing in importance. We are already the second largest supplier of gas to Europe, and with our value-chain approach and access to the pipeline network, we are strategically placed to maintain our position for decades to come.
 
We have introduced a new operating model to improve efficiency offshore; we will continue to increase industrialisation and standardisation, and we will fast-track our projects from discovery to production while minimising engineering costs. As a result, we will be able to develop smaller finds that would otherwise have been uneconomic. No one knows the NCS better than us, and we are committed to extracting the last profitable drop from these waters.
 
Improved Oil Recovery (IOR) techniques, improved regularity and efficient drilling operations are taking us beyond expectations for existing fields. Few would have imagined that the giants Statfjord, Gullfaks and Oseberg would still be in operation today. But new technology and connecting neighbouring finds will extend their lives for many years to come.
 
Keeping oil production at present levels will mean new approaches, new technology, plenty of determination — and access to new areas.

New areas

Oil production on the NCS has already passed its peak. The North Sea has been thoroughly explored, and the geology is familiar. We continue to make finds, but they are smaller. No new exploration acreage has been allocated since 1994. We believe that there are major resources waiting to be found, and we believe that many of them are where we have not yet been granted access.
 
These resources could offer a new lease of life for the Norwegian continental shelf, extending its life for decades — as well as providing a major boost to local economies. That would be good news for communities in need of jobs, and good news for Norway.

Northern areas: Our commitment to responsible development

Few controversies in Norway today are as challenging as the question of exploration off our Arctic coast. We understand the concerns. Our coastline has a uniquely beautiful environment and abundant fish stocks.

But we already operate in the Arctic — and we already comply with the strictest environmental standards anywhere in the world. We have drilled 83 exploration wells in the Barents Sea since 1981. We built the world’s northernmost LNG plant on Melkøya in Hammerfest.

A government-sponsored study has concluded that our presence in the Arctic would reduce the total risk of oil spills reaching shore, since the measures we would provide would be available to protect the coast from accidents caused by passing shipping.

We would provide the world’s best emergency preparedness against oil spills — and we would continue to coexist with the environment, local communities and traditional industries as we have done for years. We can be relied upon to act responsibly in the Arctic.

• There would be a need for more regulation on seismic activity
• We believe there would be extended periods with no seismic activity at all
• Any seismic activity would always be timed outside spawning seasons for fish
• The oil and gas industry in arctic regions in Norway is already subject to the toughest regulations in the world
• We are required to have zero oil and chemical emissions
• We already collect and purify rainwater from our drilling decks to prevent pollution
• Equipment that can discover and recover oil spills in the dark has been developed
• A standby vessel with oil-detecting radar and infrared cameras is being built
• The Norwegian Clean Seas Association for Operating Companies (NOFO) coordinates a dedicated response team of 50 specially trained personnel who are on constant standby to mobilise at short notice.