Norway Boasts of Upstream Oil and Gas Value

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--The value of the oil and gas discoveries made in Norwegian waters over the 20-year period ending in 2023 was more than twice the associated costs of the developments, its government said Monday.

Norway is a major oil and natural gas supplier to the European economies, replacing Russia as the top exporter of gas after Western-backed sanctions related to the war in Ukraine largely pushed its economic activity out of the bloc.

Production has been strong this year. Preliminary data for August from the Norwegian Offshore Directorate (NOD), a national energy regulator, showed total crude oil production averaged 1.7 million barrels per day (BBL/d), some 7.5% higher than expected, but 1.4% lower than during the same month last year.

Gas production averaged 12.3 billion cubic feet per day (Bcf/d), 5.5% higher than expected, but 1.5% below year-ago levels.

NOD on Monday said there were more than 300 oil and gas discoveries made on the Norwegian continental shelf over the 20-year period ending in 2023. Only 190 of those were deemed commercial, with about 10 million barrels of oil-equivalent (Boe) reserves.

Those discoveries translated to about US$63 billion in investments through 2023. Net cash flow from upstream activity between 2004 and 2023 was about $190 billion.

"Exploration activity has been profitable in all ocean areas," the NOD added. "Over the last five years, the value of the discoveries made is more than twice the exploration costs."

More oil also is expected now that a floating production, storage and offloading (FPSO) facility is parked over the Johan Castberg Field in the Barents Sea, where the government expects most of Norway's remaining reserves are located.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for a list of detailed reports for active Equinor projects in the Johan Castberg Field.

Production is expected to average 220,000 BBL/d of oil at its peak. Operations should begin later this year. Equinor itself reported average production at 2.05 million Boe per day during the second quarter, a 2.7% increase over the same period last year.

Nevertheless, Norway says its reserve potential could diminish without more investments, particularly in the Barents Sea, where the government expects to find most of what's left on its continental shelf.

"Based on current knowledge, production from operating fields is expected to drop by more than half during the period through and including 2033," an August report from the NOD read.

The resource base offshore is "extensive," the NOD said, and can create value for years to come.

"Failure to invest could lead to rapid dismantling of the petroleum activities," it noted.

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