Norwegian Oil Pioneer: Big Oil’s Exodus Has Started

Smaller independent oil and gas producers will have more opportunities to develop resources on the Norwegian Continental Shelf (NCS) because in ten years’ time all oil majors except state-participated Equinor will have left Norway’s offshore, the head of a small Norwegian oil firm told Reuters on Tuesday.

“I don’t think we will have any majors on the Norwegian continental shelf in 10 years. Equinor will be the only one left because of the state’s ownership,” Erik Haugane, co-founder and chief executive at OKEA, told Reuters on the day on which the company’s stock started trading on the Oslo Stock Exchange, after a successful completion of an initial public offering (IPO).

According to Haugane, most of Norway’s future oil production will come from smaller oil fields with resources of up to 100 million barrels. Oil majors are not interested in developing such smaller-scale fields for their standards, so this leaves a lot of opportunities to smaller players on the Norwegian shelf, the manager told Reuters.

In recent years, oil majors have sold off some or all of their assets in mature areas in the North Sea, in both Norway and the UK.

In Norway, ExxonMobil sold in 2017 its ownership interests in its operated fields Balder, Jotun Ringhorne, and Ringhorne East to Point Resources, but continued to hold ownership interests in fields that it doesn’t operate.

Last year Shell sold to OKEA its entire 44.56-percent interest in the Draugen field and the 12.00-percent interest in the Gjøa field for US$556 million.

In October 2018, Chevron became the first oil supermajor to leave the NCS, after Norway’s authorities accepted the sale of the only asset of the U.S. firm—a 20-percent stake in an exploration license.

In the UK North Sea, Marathon Oil said in February that it would be exiting the UK North Sea as it continues to focus on high-return U.S. shale oil operations. In April, ConocoPhillips sold its UK oil and gas business to Chrysaor Holdings for US$2.675 billion, while Chevron sold in May its North Sea assets to Ithaca Energy for US$2 billion.

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