Equinor Finds Little Oil in North Sea, but Norwegian Output Rises

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Norwegian energy company Equinor (NYSE:EQNR) (Stavanger) made an oil discovery in the North Sea, though the nation's regulators said the company will have to consider whether it's profitable enough to develop.

The Norwegian Offshore Directorate, the nation's energy regulator, said Thursday that Equinor made an oil discovery in well 25/11-H-1 H at the Svalin field in the North Sea.

Svalin is tied to the Grane platform in the North Sea. It was discovered in 1992 and has been in production since 2014. Production at Svalin peaked in 2015, though the government said further development would be possible through infill wells and exploration activities.

The regulator put the volume of the discovery at only around a half-million barrels, adding the licensees will need to "consider whether the discovery is sufficiently profitable for production."

Norwegian supplies are supporting a European economy looking to break away from a heavy dependence on Russian oil and gas. Concerned about what it considers the weaponization of those reserves, the European Commission said this week it was close to completely eliminating its reliance on Russian fossil fuels.

Analysis from the International Energy Agency (IEA) finds Norway is the seventh-largest gas producer in the world, satisfying about 3% of the global demand. Oil is similar, with Norwegian supplies accounting for around 2.3% of total global production.

"As a reputable and reliable producer, Norway has played a stabilizing role in the world's oil and gas supply, particularly in meeting European demand," the IEA said.

Norway in 2022, when the Russian invasion of Ukraine began, set a record in terms of oil and gas exports, with the export value representing 73% of total exported goods from Norway.

Norwegian production has surprised on the upside recently. The government reported that oil production averaged 1.85 million barrels per day (BBL/d) in April, the last full month for which Oslo has published data. That's about 5% higher than expected, and just above the 1.8 million BBL/d realized at that point last year.

Gas production, meanwhile, came in at 1.8 billion cubic feet per day, about 7% above the government's forecast, but below both month-ago and year-ago levels.

Like many of its peers, state-backed Equinor saw a reduction in profits during the first quarter because of lower natural gas prices. Production of 2.16 million barrels of oil equivalent per day (Boe/d), however, marked a 34,000-Boe/d increase from year-ago levels.

Norway earlier this month said it would open up 37 blocks in the Barents and Norwegian seas to would-be drillers, something the government said was necessary to maintain production.

"This is important to safeguard jobs, income for the community and Europe's energy security," said Energy Minister Terje Aasland. "Access to new, attractive acreage through the (awards in predefined areas) system is a pillar of the government's petroleum policy."

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