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10 exploration wells in Norwegian Continental Shelf expected to be postponed by Covid-19 and low oil price

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Oilfield Technology,

The Norwegian Petroleum Directorate (NPD) has said that it expects at least 10 exploration wells on the Norwegian Continental Shelf to be postponed due to the effects of the Covid-19 pandemic and low oil prices.

In January 2020, there were plans for approximately 50 exploration wells.

"What we're seeing now, is both exploration wells being postponed and delays/cancellations of geophysical mapping. As of today, it appears that around 10 exploration wells will be postponed, meaning that there will be about 40 exploration wells in 2020. However, we can't rule out further changes in this area in the future," said Ingrid Sølvberg, Director General.

The NPD added that "postponing exploration wells to next year will not necessarily have resource consequences, unless this includes exploration for time-critical resources – wells where potential discoveries are slated to be developed toward existing infrastructure in a late phase of their production cycle."

"If the low oil price situation endures over time, this could reduce the economic life of the fields. This will affect exploration, because it will no longer be considered as profitable to make discoveries near the infrastructure if it is shut down too early in relation to the production time of the potential discovery. Reduced exploration activity over the longer term will therefore also affect future production on the shelf."

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