By Nerijus Adomaitis
OSLO (Reuters) – Norwegian oil firm Okea predicts all oil majors, except Norway’s Equinor, will leave the Norwegian continental shelf in 10 years, opening up opportunities for smaller, independent firms, its chief executive said on Tuesday.
The British and Norwegian sections of the North Sea, where production started in the 1960s and 1970s, have seen an exodus of oil majors as some fields mature or dry up and as they focus on larger offshore developments elsewhere.
In Norway, ExxonMobil, Chevron and BP have sold their offshore assets, while Total and Shell have divested part of their holdings. ConocoPhillips still operates Ekofisk.
Okea, whose co-founders include former Norwegian oil and energy minister Ola Borten Moe, acquired Shell’s stakes and operatorship in Norway’s Draugen and Gjoea fields for 4.5 billion Norwegian crowns ($514.7 million) last year. Shell operates Ormen Lange, Norway’s second-largest gas field.
“I don’t think we will have any majors on the Norwegian continental shelf in 10 years. Equinor will be the only one left because of the state’s ownership,” Okea co-founder and CEO Erik Haugane told Reuters.
He spoke as the company, majority owned by Thailand’s Bangchak Corporation and private equity firm Seacrest Capital, started trading on the Oslo bourse after raising 315 million crowns in an initial public offering.
Its shares opened slightly below the IPO price of 21 crowns, and were trading at 20.6 crowns per share by 0830 GMT. Brokerage Pareto Securities has the right to buy up to 2.25 million shares to support the price until July 17.
Haugane said Okea was set to focus on developing smaller fields with resources of up to 100 million barrels, which are ignored by major companies.
“Most of Norwegian oil production is predicted to come from such fields in the future, but large firms have less interest in developing those, and that’s where we can have a significant contribution,” he said.
“If someone can make money on a shop or a garage by being a small entrepreneur, so can we, as we have much lower management costs and can make decisions faster,” he added.
Okea is a partner in Repsol’s Yme field re-development, which has recoverable oil reserves of 65 million barrels, with production scheduled to start in the second quarter of 2020.
The company expects its production to rise to 30,000 barrels of oil equivalent per day (boepd) in 2023 from around 20,000 boepd in 2019, as Yme comes on line.
($1 = 8.7435 Norwegian crowns)
(Reporting by Nerijus Adomaitis, editing by Emelia Sithole-Matarise)