Norwegian oil and gas operator DNO has announced a ‘significant’ gas and condensate discovery on the Carmen prospect in Norwegian North Sea licence PL1148, in which the company holds a 30% interest. Preliminary evaluations indicate gross recoverable resources in the range of 120–230mn boe. At 175mn boe, the mid-point of this range, Carmen ranks as the largest discovery on the Norwegian Continental Shelf since 2013, says DNO.

Carmen is the company’s sixth discovery in the Troll-Gjøa area since 2021 and is reported to be ‘located close to existing infrastructure with clear routes towards commercialisation’. The other discoveries are Røver Nord, Kveikje, Ofelia, Røver Sør and Heisenberg.

‘Norway is the gift that keeps on giving,’ comments DNO’s Executive Chairman Bijan Mossavar-Rahmani. ‘Carmen proves there are important discoveries still to be made.’

The other partners in the Carmen licence are Wellesley Petroleum (operator, 50%), Equinor Energy (10%) and Aker BP (10%).

Barents Sea gas pipeline back on agenda
In other Norwegian oil and gas news, market analyst Wood Mackenzie suggests that ‘after spending years in the doldrums, Russia’s invasion of Ukraine has potentially brought the Barents Sea pipeline back onto the agenda in Norway’. However, it notes that there are ‘several hurdles’ the proposed $5bn, 800 km, 15mn m²/d pipeline would have to overcome before it would be given the green light.

Linking gas fields in the Barents Sea in northern Norway to European markets, the pipeline could help alleviate the continent’s dependence on LNG imports. The report warns that although the Barents Sea basin ‘has enough existing resources to fill the pipeline’, the costs involved ‘would make developing the gas more expensive than alternative imports from new LNG developments’. However, Daniel Rogers, Senior Analyst at Wood Mackenzie, notes that ‘gas from the area offers a cleaner alternative to LNG’.

The report adds that state-funding of the pipeline, or the introduction of a carbon border adjustment mechanism (a tool designed by the European Union (EU) to encourage cleaner industrial production in non-EU countries) on gas imports to Europe would increase cost competitiveness.

‘The carbon and socio-economic argument for a pipeline – and further development of the basin – is strong, but it won’t happen without government support,’ Rogers says. ‘However, if long-term European gas demand and prices fall faster than expected, this would put further pressure on the viability of the project.’

The report also states that while Barents Sea gas would help alleviate Norwegian production decline, it wouldn’t be a gamechanger. A bigger pipe would be required to incentivise high-impact exploration and realise the basin’s full potential.

Currently, gas in the Barents Sea is produced from the Snøhvit area subsea fields and is sent via pipeline to the Hammerfest LNG facility. The facility is expected to be at full capacity until the 2040s. There is currently no direct pipeline route connecting Barents Sea gas resources to the main Norwegian pipeline network.

‘Compelling’ business case for Rosebank and Cambo field development, suggests WoodMac
Meanwhile, development of the Rosebank and Cambo oil fields located west of the Shetland Islands could save 17mn tonnes of CO₂ emissions over their projected lifetimes compared to the equivalent amount of imported oil and gas, according to Malcolm Forbes-Cable, Vice President of Energy Consulting (Upstream, EMEA) at Wood Mackenzie. They could also contribute as much as £40bn of gross value add (GVA) to the UK economy and create 900 long-term jobs, he claims.

‘From an economic perspective, the business-case for the development of these two fields is compelling and there is the added benefit of the additional energy security it would bring to the UK,’ he says.

According to Wood Mackenzie, UK oil and gas production has materially lower emissions than imports, meaning the additional emissions from imports would be 500% more than the hydrocarbons from an electrified Rosebank and Cambo.

Operated by Norway’s Equinor, Rosebank has estimated reserves of 300mn barrels, while Cambo is operated by UK company Ithaca Energy and is estimated to hold 150mn barrels.

‘With final investment decisions (FID) looming, both Rosebank and Cambo act as barometers for the future of oil and gas production in the UK North Sea,’ says Forbes-Cable. ‘If neither of these fields go to full development, it will be difficult to make a clear economic case for fields with less potential.’

However, recent media reports suggest that a decision regarding development of the Rosebank oil and gas field has been further postponed. The FID was expected in 3Q2023, followed by that for Cambo. It is understood that the decision has been pushed back amidst concerns about the project’s alignment with climate targets. Environmental campaigners have long protested against the projects, arguing that their development flies in the face of the UK government’s target of achieving net zero by 2050.