Norway sees rapid growth in oil output from 30-year lows

Equinor says the Johan Sverdrup oil field, situated some 140 km off the southwestern coast of Norway, is expected to remain in production for at least half a century. (AFP)
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Updated 10 January 2020

Norway sees rapid growth in oil output from 30-year lows

  • By 2023, combined production of oil and gas is expected to reach close to record level

STAVANGER: Norway’s oil output will grow by 43 percent from 2019 to 2024 as new fields come on stream and older production facilities are upgraded, forecasts from the Norwegian Petroleum Directorate (NPD) showed on Thursday.

The numbers show a revival for Norwegian crude production, which last year fell to its lowest level since 1989 as older fields gradually depleted their reserves.

By 2023, combined output of oil and gas is expected to reach close to the record level seen in 2004, the agency said, although gas would have a greater share than before.

“This time oil will account for about half of the total,” NPD chief Ingrid Soelvberg told a news conference.

Crude output from the country’s offshore fields is now predicted to hit 2.02 million barrels per day in 2024, up from a 30-year low of 1.41 million last year, as major oilfields Sverdrup and Castberg gradually come on stream.

“After two years of lower output, production will rise again in 2020, mainly due to the startup of Johan Sverdrup but also due to other finds,” Soelvberg said.

Natural gas production is predicted to rise to 117.1 billion cubic meters (bcm) in 2020 from 113.2 bcm in 2019, but below a previous forecast of 120.2 bcm, it added.

The NPD now expects Norway’s oil output to total 1.76 million barrels per day in 2020, up from a previous forecast of 1.74 million made a year ago.

While exploration increased in 2019, to 57 wells from 53 the previous year, it will likely decline to 50 wells in 2020, the NPD said.

Exploration in the Barents Sea in the Arctic brought only one discovery last year, an area that once had been expected to be a new oil and gas province for the Nordic country.

State-controlled Equinor and its partners earlier on Thursday announced plans to further extend production from their Statfjord field, which has been producing since the 1970s and is now expected to remain on stream beyond 2040.

While Norway supports the 2015 Paris climate agreement, and aims to sharply reduce its domestic carbon emissions in the coming decades, it also says it will continue to pump and sell petroleum to others for as long as demand exists.

The Sverdrup field is expected to remain in production for at least a half century, according to Equinor’s plan. 

Saudi Arabia, Russia reach oil output deal and urge others to keep promises

Updated 3 min 2 sec ago

Saudi Arabia, Russia reach oil output deal and urge others to keep promises

  • Big two OPEC+ producers will extend production cuts but want compliance from all members

DUBAI: Saudi Arabia and Russia have reached agreement on extending their oil output cuts and are taking a firm line with other producers to keep their pledges.

Ahead of a meeting of OPEC+, the two biggest producers in the alliance are telling others they must adhere to agreed production guidelines or risk a return to the market chaos of April, when some oil prices hit all-time lows.

An official at one Opec delegation told Arab News an agreement was in place between Saudi Arabia and Russia to extend the historic 9.7 million barrel cuts deal for at least one month, with a regularly monthly review— but it was contingent on all OPEC+ countries keeping their promises on current production levels.

“There is no dispute between Saudi Arabia and Russia on this,” the official said. “They are sticking by the rules, and they want to put pressure on to make all OPEC+ members do the same.”

Most other OPEC+ countries are believed to be willing to stick by the April cuts for an extended period. Nigeria and Iraq are considering the proposals for stronger compliance.

A “virtual” OPEC+ meeting could still go ahead at short notice, or could take place on June 9 as originally scheduled. Saudi Arabia has additional bargaining leverage in the 1 milion extra barrels it cut voluntarily, which could be reinstated at the end of this month 

Crude prices, which topped $40 a barrel for Brent this week partly on hopes that the cuts would be extended, reflected the late uncertainty, and slipped back to just over $39.

Oil experts do not expect the negotiations over compliance to derail a long term OPEC+ deal. “Compliance is always an issue, but all will want to avoid any instability,” said Robin Mills, chief executive of Qamar Energy consultancy. “It’s quite an achievement to get to $40 from where they were a few weeks ago.”