Aker BP Investing in Norway, Aims for Production Boost

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Norwegian energy company Aker BP (Lysaker) said it was on a major investment push in Norway, aiming to boost production by more than 20% within three years.

"At Aker BP, we are creating the oil and gas company of the future with low costs, low emissions, profitable growth and attractive returns," Chief Executive Officer (CEO) Karl Johnny Hersvik said Tuesday.

The Norwegian Offshore Directorate (NOD), the nation's energy regulator, considers regional production to be low carbon. Energy companies such as Equinor (NYSE:EQNR) (Stavanger, Norway) are opting for electricity over diesel at its offshore rigs and emissions of carbon dioxide from production average 15 pounds per barrel, relative to a global average of about 37 pounds.

NOD, however, warned recently that total production from existing fields is on pace to decline by more than half from the current levels by 2033 without major investments. To that end, Aker BP said that it, along with its license partners, aims to invest some $19 billion on projects on the Norwegian continental shelf.

Norway is a major energy supplier and one of the main oil and gas exporters to the European Union. The nation produced an average of 12.7 billion cubic feet per day (Bcf/d) in natural gas last month, 4.1% higher than June levels and 12.3% above the government's expectations.

Oil production averaged 1.8 million barrels per day (BBL/d), 5.9% above expectations and 6.3% higher than during July 2023.

Aker BP, for its part, said it would use the investments to boost production by around 20%, to around 525,000 barrels of oil equivalent per day (Boe/d), by 2028. The company during the second quarter reported production at 444,000 Boe/d and put its full-year guidance at between 420,000 and 440,000 Boe/d. Guidance marked a 2.5% increase from previous goals.

Aker BP said all of its projects are on schedule, supporting some 250 Norwegian suppliers.

"We have promised Norwegian politicians to ensure activity, develop competence, and prepare the industry for a future in new value chains," the CEO said. "For the industry to transition, we need activity."

During the first quarter, Aker BP and its licensing partners put the Hanz project in the North Sea into production. That field represents $300 million in total investments in a field expected to hold 20 million Boe.


Much of what's left offshore Norway, however, is in the Barents Sea.

In its base-case scenario, the government said it still expects multiple discoveries in its territorial waters, which would be accompanied by investments necessary to stimulate production at existing fields.

The government maintained that exploration and production was a lucrative business. The value of discoveries over the last five years is more than twice the exploration cost. Investing in what's left, however, is key to avoiding a gradual decline.

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