OSLO: Norway, Europe’s second largest oil producer, is likely to miss its full-year crude output forecast because of outages and technical problems, although gas sales could exceed projections, the Norwegian Petroleum Directorate said.
Oil output is lagging because several key fields failed to come online or halted for longer-than-expected maintenance but good demand for gas, particularly in the first half of the year at least partially compensated for the shortfall.
“We’re very likely to miss on oil ... but gas is a different story, most probably we’ll overproduce,” Jan Bygdevoll, the NPD’s forecasting director, said.
“We have high projections for the remainder of the year and some facilities we had anticipated will not even start production.”
The biggest factor in the underperformance was BP’s Skarv project, expected to come onstream in May or June producing 80,000 barrels of oil per day, a relatively big project for Norway.
The NPD now expects nothing from Skarv even though BP insists it will come online in the quarter.
“It’s not an exact science but our plans are still for production in the fourth quarter,” a BP spokesman said.
BP’s Ula field, shut after an accident and taking 11,000 barrels per day off the market, could also resume, analysts added.
However, Talisman’s Yme project, a relatively small development, is still struggling to resolve technical issues and will not produce this year.
“If you look at the outages, it’s a no brainer that targets can’t be met,” Nordea oil analyst Helge AndrÈ Martinsen said.
“It looks a lot worse on paper.”
Nine month oil production was 426 million barrels, 2 percent short of forecasts and the last three months of the year had been expected to deliver some of the highest monthly figures for the years.
Gas sales totalled 83.8 billion cubic meters for the nine months, above a forecast for 75.4 billion.
“Gas is a lot more difficult to predict because it all depends on the weather and markets, so there’s a lot more variation,” the NPD’s Bygdevoll said.
Gas sales are likely to suffer somewhat in October after a string of unplanned outages but that is not enough to cause a miss in the 106.7 billion cubic meter full year target, analysts said.
Statoil, the biggest producer in Norway, declined to comment and said any changes to its forecasts would be made during its third-quarter result presentation.
Other top producers in Norway include ExxonMobil, Royal Dutch Shell and ConocoPhillips.
Norway to miss 2012 oil output target
