A player wishing to participate in petroleum operations on the NCS as a licensee or operator must contribute to increased value creation there. The company must have HSE competence which helps to strengthen safety in the Norwegian offshore sector. Assessing potential new entrants is the responsibility of the PSA and the Norwegian Petroleum Directorate (NPD), on behalf of their parent ministries.
What is assessed?
In order to be prequalified, a company must demonstrate that it can contribute to increased value creation and has HSE competence which helps to strengthen safety. This includes documenting that it has:
- Competence with and capacity for HSE work
- An adequate management system
- Financial strength (assessed by the NPD and the Ministry of Finance).
Both the PSA and the NPD use this evaluation form as a tool in the process of assessing new players.
Expertise and capacity
A key requirement in the Norwegian Petroleum Act is that companies have the necessary competence and organisation in Norway. As part of a Norwegian technical community, they must be able to both contribute to – and reap – unique experience from the NCS.
Licensees must have a minimum staffing of eight-nine people in Norway with technical expertise in relevant disciplines which equips them to evaluate, understand and follow up activities in a production licence.
Relevant disciplines are:
- Geology and geophysics
- Reservoir technology
- Production methods and other relevant technology
- Health, safety and the environment (HSE).
Operators must in addition have their own organisation in Norway which is capable of dealing with the assignments they face at any given time. Since stepping up from the licensee role to taking on an operatorship presents major challenges, additional expertise and capacity must be in place in order to do this work in a prudent manner.
The purpose of the prequalification scheme is to help improve predictability for a new company wishing to become a participant on the NCS. It provides this applicant with an advance assessment of its suitability for such participation.
A final assessment takes place when the company is in line to take part in a production licence, either through a licensing-round award or by farming in.
The safety regulators, in the shape of the PSA and the Ministry of Labour and Social Affairs, submit their technical assessments to the Ministry of Petroleum and Energy. The latter decides whether applications for prequalification are to be approved.
What is a licensee?
A licensee is a company with an interest in a production licence awarded pursuant to the Norwegian Petroleum Act. A licence usually has several licensees, but only one of these is appointed as the operator. All licensees are duty-bound to make an active contribution to the licence, in part by seeing to it that the operator has the activities under good control.
What is an operator?
An operator is the company responsible for day-to-day management of activities in a production licence on behalf of the licensees. It has an overall responsibility for ensuring that operations are conducted in a prudent manner and in accordance with the regulations. The operator must see to it that everyone carrying out work on its behalf complies with the HSE regulations.