The North Sea Oil

A Norwegian Adventure

North Sea oil rig

The North Sea oil is an adventure that started in the early 1960's, and has developed enourmous during these years. By the end of 2006 there was 52 oil fields in production on the Norwegian Continental Shelf, and the production was 2.8 billion barrels per day.

In addition these oil fields produced 88 billion standard cubic metres of gas.

This makes it easy to understand that the petroleum activities has made a huge contribution to the economic growth in Norway, and made the financing of the Norwegian welfare state possible.

Since 1995 the oil production in Norway have held a daily level of 3 million barrels per day.

During the first 30 years the industry has created values in excess of NOK 5000 billion in current terms. The petroleum sector accounted for 25 percent of value creation in 2006 in Norway, and this was twice the creation value of all manufacturing industry and about 18 times the total creation value of the Norwegian primary industries for that year.

Oil Rig in the North Sea Photo: Marius Fiksdal


The History Begins

Until 1959, when the Netherlands found gas at Groningen, very few people believed that it possibly could conceal rich oil and gas deposits in the Norwegian part of the North Sea.

The Norwegian geological expertise was quite negative to the possibility of oil and gas deposits, but fortunately it did not stop the most enthusiastic people.

Norwegian ship for oil industry

In 1962 the Philips Petroleum Company sent an application to the Norwegian authorities, for exploration in the North Sea.

The company wanted a licence for the parts of the North Sea that were on Norwegian territory, and that would possibly be included in the Norwegian shelf. The offer was 160,000 dollars per month, and was seen as an attempt to get exclusive rights to the North Sea Oil.

For the Norwegian authorities it was out of the question to hand over the whole shelf to one company. If Norwegian areas were to be explored, they wanted more companies to participate.


Sovereignty

In 1963 the Norwegian government proclaimed sovereignty over the Norwegian Continental Shelf.

Even though Norway proclaimed sovereignty of large offshore areas, there was important clarifications needed on how to divide the continental shelf, primarily with Denmark and Great Britain.

These agreements were reached in March 1965, and the involved countries agreed on dividing the continental shelf in accordance with the median line principle.


Awarding licences

Oil Rig  Photo: Marius Fiksdal

The first round on awarding licenses was announced in April 1965, when 22 production licences for a total of 78 blocks were given to oil companies or groups of companies.

The first well was drilled in the summer of 1966, but was found to be dry. The real Norwegian oil adventure began with the Ekofisk discovery in 1969.  The first production of North Sea Oil started in 1971, and in the next years a number of important discoverys of oil wells was found.

In these first years the foreign companies dominated the exploration of oil sources, and were fully responsible for developing the first Norwegian oil and gas fields.

In order to carry out the government's participation in the oil industry,the Norwegian authorities established the company "Statoil" in 1972.
After more than 30 years of oil and gas production, calculations shows that only one third of the total expected resources on the Norwegian part of the Continental shelf has been produced.


Securing Norwegian welfare

The huge resources of oil and gas remaining in the North Sea secures the welfare for the Norwegian people for many years ahead, and also gives the country the possibility to plan, establish and build alternative industries for the years to come when the oil adventure is over.


Go from The North Sea Oil to read more facts about Norway