By Mathias Schioldborg, Rystad Energy
While Norway and the UK share a continental border, the two countries have seen their oil and gas industries take divergent paths during the last decade. While the Norwegian Continental Shelf (NCS) have seen a booming sanctioning market, a strong investment level and managed to uphold its oil and production, the UK’s industry has taken a more muted path with falling activity and production. The goal here is to examine the two producers in terms of remaining resource potential, project sanctioning, investment paths, and production potential.
Figure 1 shows the estimated remaining recoverable resources for Norway and the UK Continental Shelf (UKCS) split by resource lifecycle and hydrocarbon type, in Rystad Energy’s base case. Norway has a strong upper hand by holding a total of 28.5 billion barrels of oil equivalent (boe) in recoverable volumes, against the 12.9 billion boe estimated in UK waters. The two countries have a relatively equal distribution between oil and gas volumes, although Norway has a slightly higher share of gas in its portfolio.
Besides holding more than twice the volumes, Norway also has a significantly larger share of its remaining resources in fields that have already started production – measuring 50% against the UK’s 21%. This gives Norway an edge as these volumes are much more likely to be extracted in the near-to medium term, also lifting the economic value of the resources. A similar pattern can be found for schemes that are currently being developed, as 8% of Norway’s resources belong in this category, against only 3% in the UK.
Over half of the UK’s estimated remaining resources are yet to be discovered (54%), led by 4.2 billion boe in undiscovered gas volumes – comprising 66% of its remaining gas reserves. This indicates that new exploration activity will be necessary for the country to realize most of its remaining potential, which again may prove challenging given the maturity of the region and low interest seen in the last few years. With this, the NCS remains significantly better slated to unlock new volumes in the next decade.