Norway's NPD recommends APA leasing scheme

Uchenna Izundu
International Editor

LONDON, Feb. 6 -- The Norwegian Petroleum Directorate (NPD) has recommended to the petroleum ministry that the annual Awards in Predefined Areas (APA) licensing round continue because it introduces new operators to exploring mature areas and using existing infrastructure on the Norwegian continental shelf.

The NPD said in its submission "that the work commitments in the APA scheme have led to quicker circulation of acreage which, together with the large number of production licenses awarded, has resulted in increased exploration activity in mature areas."

It added that the licensing round has contributed to greater predictability in award policies, which has in turn given the companies a better opportunity to carry out long-term planning and a better basis for allocating resources.

Last fall, the ministry launched a public consultation on the scheme following concerns by environmental and fishing organizations about the risk of increased exploration and production in the Barents Sea that could significantly affect the fisheries industry. The APA has been running since 2003.

A spokesman from the ministry told OGJ it received 70 responses, mainly from oil companies and representatives of fishing and environmental organizations. "The consultation was very broad, and we want to finish the analysis by the summer," he said. "We haven't taken any decision on any changes to the system as of yet."

In December, the ministry offered 34 production licenses to 40 companies and plans to award licenses this spring. They are in the Norwegian North Sea, Norwegian Sea, and the Barents Sea (OGJ Online, Jan.20, 2009).

Contact Uchenna Izundu at uchennai@pennwell.com.