Norway’s oil and gas industry is the world’s greenest, run to benefit society as well as private companies. Project director Eva Halland explains the Norwegian Petroleum Directorate’s role in the sector’s operations.
World Expro: Can we start with what the NPD does?
Eva Halland: The NPD is part of the Oil and Energy Ministry in Norway, and we do all the technical evaluation and recommendation regarding the opening of new areas, development plans, and production plans. Then we give our recommendations to the ministry.
We have a very good, tight contact with the oil companies, in Norway and we have several ways of following up what they do in the hope that they behave in a certain way and do what we really want them to do. We have a department in London and we have a system call PIAF, which is performance analysis for fields in production.
We do an evaluation each New Year or thereabouts, going through all the available data and information. It is important to note that although we are part of the ministry, we are an independent agency.
So we are not a department but we report to the ministry and we do the technical work for it.
The other thing to note is that a regular part of our work has always been to observe licences. PIAF is a new system that was introduced a couple of years ago, so that is a new way of monitoring the fields, but we have always observed licences and we play a very active part when it comes to development plans.
When companies are making plans, they do that very closely with us.
So you are unbiased; you give an expert opinion.
We represent society. Our goal is that the resources on the Norwegian continental shelf should be produced in a way that benefits Norwegian society in the optimum way, so we are society’s spokesperson to the oil industry and we take care of public interest.
We do this using all the data that is collected by the oil companies – they have to report to us.
Are they compliant, are they helpful?
Oh yes, they have to be. We are the authority; we are not an advisory board or suchlike.
What we work towards is having good communication. Trust is the key, and that is what we aim for.
So they don’t have any problems with reporting anything and we get what we want to have.
It’s a mutual trust. You must trust them and they have to trust you.
We don’t want oil companies to do things that aren’t good for them. Whatever happens has to be good for all parties.
You mentioned PIAF, performance indicator analysis for fields. Can you explain this further?
We do this analysis on reported data from the oil companies, and from that we get very good information on the status of the fields, on the results they have and on any plans. We then have discussions based on that.
We present our analysis to the operators and the licence group, and we discuss what can be done to get a higher score and better results.
So it’s a mechanism that scores the fields. And then you give the information back to the oil companies that are involved for them to help themselves, to look at how they should improve their functionality.
We also use it to see how some fields are doing, whether they’re doing interesting things that could help other fields.
So it opens communications between the oil companies as well?
We share our findings with the operator and they share it with the licensees, but if there are any good ideas, we discuss how we can use the information and push new ideas to other companies. We don’t make an official list saying ‘this field is number one’ but we use the information for companies to improve their performance, and to find trends and ideas for other companies.
What are the performance indicators? What data do you receive?
We have about 100 indicators on various levels, so we have a lot of information on each field, both technical and also more performance based.
Norway has the greenest oil and gas in the world. How do you maintain that? Is it through your performance indicators, so you can see that companies are doing what they are supposed to?
Each year we report a lot of data, including emissions and green data, from the companies, and we analyse it to see how each field behaves and if there are trend that can be transferred to the whole industry. For the past few years we have a lot of communication and discussions with the companies plotting each field’s emissions and how they relate to climatic impact, and we give them a very hard push to make sure that they are using new technologies and looking at new ways to reduce their emissions.
What’s your main focus at the moment?
To increase recovery from the fields in production. Today 54% of discovered oil is left in the ground.
We do a lot of work to find ways to increase recovery and we push companies to find new prediction methods.
There is a lot of technology available but it’s difficult to have it tested in the fields. This year we will focus on getting companies to run pilots to increase recovery.
The other focus is on discoveries. Last year was very good here in Norway.
We had 25 small discoveries and we discovered nearly as much as we produced.
That’s an impressive ratio
Yes, but we don’t yet know how much of that can be produced. Our forecast for production at existing fields is deeper than last year.
I suppose your main efforts are to encourage companies to take risks to make the most of the discoveries that you have. Do oil companies feel that because they are still discovering so much, they can continue with that rather than making the most of what they’ve already found?
We want to make the most of what we find and what is in production. According to state plans, 56% of oil will remain in the ground if we don’t make extra effort to produce it. One of the things do is to encourage the company to cooperate on field pilots.
What else are you focusing on in the next year?
In order to make discoveries we have to drill a lot of wells. We had a very good record last year, with 56 exploration wells, up from about 13 a few years ago.
This year our plan is for about 50-60 exploration wells. We have about 73 discoveries under evaluation at this stage, and to be fair they are small but we will focus on whether it’s possible to develop them.
Several are in more mature areas where there is an infrastructure to tap into but several are in more remote are here we have to get the companies together to see if it’s possible to make an infrastructure to develop them. So that’s something we have to focus on in the next year, finding new ways of making a cost-effective development of what we have discovered.
But we also want to make a lot more discoveries. We hope this year will be just as good, or a bit better, than last year.
What about technology?
We have several research programmes going on in which the ministry and the authority put in some money and we cooperate with the industry, so the technology can be shared with everyone. We’ve had a lot of good developments from those projects but sadly the government has reduced the sum of money available for R&D projects, so we hope the companies will take up the slack.
But the structure of companies we deal with creates a challenge. We have StatoilHydro, which is definitely the biggest player, we have the international companies, which are concentrating on the fields they already run, and then we have a lot of new players.
Since 2000 I think we have prequalified 55 new companies and they are not exactly the biggest risk takers or the biggest technology movers, so that represents a challenge.
So that’s where you come in with your technology and make advances. What do you see on the horizon for technology? What will make the biggest difference to the industry?
I think several technologies we are working with will come into use at large fields and those in the decline phase that are producing a lot of water, which is a big challenge at the moment, as are emissions and the climatic issues with production. But if I mention one technology I should focus on subsea, and separation and injection technology.
We will see a real jump if we can get that to really work.