VZCZCXRO5391
PP RUEHIK
DE RUEHNY #0033 0221431
ZNR UUUUU ZZH
P 221431Z JAN 10
FM AMEMBASSY OSLO
TO RUEHC/SECSTATE WASHDC PRIORITY 8124
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY

UNCLAS OSLO 000033 
 
STATE FOR EUR/NB, EEB/ESC 
 
SENSITIVE 
SIPDIS 
 
¶E. O. 12958:  N/A 
TAGS: EPET EINV SENV ECON NO
SUBJECT: HIGH INTEREST IN NORWEGIAN CONTINETAL SHELF LICENSE AWARDS 
AND NOMINATIONS 
 
REF: A. Oslo 697 
 
¶1. (SBU) Summary: U.S. companies participated in a high-interest 
nomination round for Norwegian Continental Shelf (NCS) licenses. The 
GON also awarded licenses in a separate predefined/mature areas 
licensing round. The high interest sends positive signals about the 
competitive situation on the shelf, but the oil and gas industry 
continues to call for clear political signals about future NCS 
development. End Summary. 
 
High Interest, Despite Not-So Attractive Acreage 
--------------------------------------------- --- 
 
¶2. (SBU) The Norwegian Continental Shelf 21st licensing round 
nomination period concluded on January 13, drawing significant 
industry interest. 43 companies participated n the nomination round, 
and 307 blocks or parts of blocks have been nominated, 138 of which 
by two or more companies. U.S. majors submitting nominations 
included Chevron, ConocoPhillips, ExxonMobil, Hess and Marathon. The 
Petroleum Directorate will now evaluate the nominations, and 
licenses are set to be awarded in the spring of 2011. 
 
¶3. (SBU) The 21st licensing round announcement drew surprise 
reactions in November, coming so soon after the 20th round, and 
industry complained that the acreage open to nominations was almost 
exclusively in mature fields (reftel). However, it seems companies 
are eager to have what they can get, and the high level of industry 
interest shows commitment to sustaining high activity levels on the 
NCS. Though company participation is slightly lower this time around 
(43 vs. 46 in the 20th round), it is still much higher than in the 
17th, 18th, and 19th rounds, in which only between 14-19 companies 
participated. Some of this is explained by the formation and entry 
of new companies working on the NCS, but that again may be taken as 
a positive sign for the competitive situation on the NCS, overall. 
 
 
Filler-Round 
------------ 
 
¶4. (SBU) This week, the Ministry of Petroleum also announced the 
results of the seventh Predefined Acreage licensing round. This is a 
separate and more regular system of licensing, "a filler-round", 
focused on minor blocks in mature areas near existing installations. 
38 licenses were awarded, and U.S. companies received stakes in 10 
of these. 
 
¶5. (SBU) Comment: Despite strongQndustry interest in both of these 
license rounds, and the active presence of nearly 50 petroleum 
producing companies on the NCS, the GON is still unable to commit to 
opening of fresh acreage in northern waters. Norwegian authorities 
state that they interpret the high interest levels as a sign that 
industry is happy with the current speed and form of licensing, 
while the feedback Post gets from industry is that new acreage needs 
to be opened soon, and that active participation in these minor 
rounds is simply a way of maintaining stable operations while 
anticipating the awarding of significant new areas. Opening new 
acreage continues to be politically controversial given the 
opposition to the idea from the Socialist Left and Center parties, 
both junior partners in the governing Labor Party coalition. End 
Comment. 
 
WHITE