Exploration for oil and gas
In brief: We continue explore for oil and gas to meet the global demand for energy and support the transition to a low-carbon future. As the world population and economies grow, the need for reliable and affordable energy sources remains critical.
Our expertise in developing resources responsibly and efficiently enables us to contribute to global energy security. At the same time, we are investing in renewable energy and low-carbon solutions while maintaining a profitable and competitive hydrocarbon portfolio. This dual approach enables us to create long-term shareholder value and contribute to the United Nations Sustainable Development Goals.
Going forward, when we access new acreage and future exploration, we will focus on areas where we already have activity and existing infrastructure, ensuring shorter time span from discovery to production to capitalise on previous investments. Frontier exploration will be limited.
Oil and gas are essential for meeting the world's energy needs.
Existing fields eventually become depleted and produce less oil and gas over time, so to continue meeting demand, we must continually search for new sources.
Even as we move towards a carbon-neutral future, the world still needs predictable, secure, and stable energy supplies as the energy transition progresses. Exploration is vital to ensuring that continuity of supply.
Why do we need to find more oil and gas?
It’s hard to predict the future with certainty, but the world’s population is expected to increase, more people around the world will increase their standard of living, economic growth will continue, and overall energy demand will inevitably increase. Even with energy efficiency measures, this is a trend that is expected to continue.
Even though significant progress has been made developing renewable energy sources like wind and solar, oil and gas remain the primary sources of energy for most of the world's transportation, heating, and electricity generation.
Because production from existing oil and gas wells always tails off as they become depleted, supplies from existing assets cannot meet demand alone. If we didn’t explore for more, severe energy shortages would result.
This means that continued exploration and investment are needed to ensure energy security. In recent years we have seen how even moderate disturbances to energy supplies can cause sharp increases in prices and supply challenges.
Reaching the climate target of well below 2°C global warming will also require exponential growth in electrification, renewables and the establishment of new value chains such as carbon capture and storage (CCS/CCUS) and hydrogen.
A leading global explorer
We have worldwide exploration activities with the aim of positioning ourselves as one of the leading global exploration companies.
We do this by accessing high-potential new acreage in priority areas, and internationally, we prioritise significant wells in growth and frontier basins.
On the NCS we prioritise near-field exploration in addition to selected high-graded step-outs which could have material or play-opening potential. Our ambition is to create superior value every year, primarily in high graded prolific basins by identifying & accessing subsurface sweet-spots and safely drilling a high-quality portfolio of cost-efficient wells.
We have already built a strong position in some of the world’s most prolific oil and gas provinces, including the Norwegian continental shelf, the Gulf of Mexico and Brazil, which are considered to be our core areas for exploration activities.
Prolific basins are proven basins which have already delivered significant oil and gas volumes.
OUR NCS EXPLORATION STRATEGY IN SUMMARY:
- We will explore for volumes in mature areas where discoveries can be tied into existing infrastructure to maximise the value of the investments we have made over 40 years.
- We will drill between 20-30 exploration wells each year moving forward.
- Around 80 per cent of the exploration wells will be drilled in familiar areas near infrastructure, but certain new areas and ideas will be tested.
- We will drill wells based on three main criteria: high profitability and low break-even prices, short payback time, and low carbon intensity.
- Exploration is crucial in order to maintain the cash flow from the NCS and to secure the gas volumes necessary to develop a value chain for blue hydrogen.
Safe and responsible operations are essential for our licence to operate and an enabler of long-term value creation. We have set clear targets for continuous improvement of our safety records. Responsible operations include managing our environmental impact, respecting human rights, and promoting integrity and transparency.
From idea to oil
Most of the easy-to-find oil and gas in the world has already been discovered, forcing our explorationists to continuously come up with innovative ideas and utilising the latest technologies.
We believe that our culture of inquisitiveness is unique and drives the idea generation and technology that ultimately leads to new discoveries. Having the best people, data and tools available have allowed us to become one of the leading exploration companies in recent years.