Norway's New Oil & Gas Projects Top $18 Billion

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Norway's Ministry of Petroleum and Energy has greenlit 19 oil and gas projects with an investment value in excess of US$18 billion.

The projects, located on the Norwegian Continental Shelf, consist of new developments, further development of existing fields and investments in projects for increased extraction at existing fields. It represents a jump in approved projects and comes after Norway's government adopted temporary changes to the Petroleum Tax Act to make it easier for oil companies to carry out planned investments. The changes were in response to the sharp drop in oil demand seen in the first half of 2020 due to the COVID-19 pandemic.

"The projects are an important contribution to Europe's energy security. Norway is the only net exporter of oil and gas in Europe, and by implementing these projects we ensure new production from the latter half of the 2020s, so that we can maintain high Norwegian deliveries," commented Oil and Energy Minister Terje Aasland. "The implementation of these projects secures jobs, builds competence and provides a basis for further technology development which will be decisive for the development in other industries such as carbon capture and storage, hydrogen, offshore wind, aquaculture and minerals."

He added: "These are projects that contribute to continued high and stable production from the Norwegian continental shelf, and to employment and value creation for the whole of society. We are further developing the petroleum business so that jobs and large incomes are created for the community."

To date, projects that were adopted in the period 2020-2022 and fall under the temporary tax changes will result in total investments of around US$41 billion--of which US$27 billion will involve Norwegian companies. The investments will secure around 158,000 full-time jobs from the period 2020 to 2029. The largest of the projects are in the Yggdrasil and Fenris areas, being developed by Aker BP (Lysakar, Norway) and partners. Yggdrasil consists of a number of oil field license groups including Hugin, Fulla and Munin. Combined investment is expected to be US$15 billion eventually while resources in the Yggdrasil area are estimated at more than 700 million barrels. Industrial Info is tracking 50 projects associated with Yggdrasil with a combined investment value in excess of US$3 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the report.

Minister Aasland said: "The Yggdrasil project is the largest industrial project the parliament will deal with in this period. The projects generate activity at the shipyards in Egersund, Stavanger, Haugesund, at Stord, in Verdal and in Sandnessjøen, as well as at a number of suppliers and sub-suppliers across the country."

Karl Johnny Hersvik, chief executive officer of Aker BP, stated: "The Yggdrasil and Valhall PWP-Fenris development projects are direct responses to the activity package approved by parliament three years ago. It aimed to secure activity, protect jobs, develop expertise and further develop the industry at a time characterized by the pandemic, record-low oil prices and steep declines in investments. Together with our license partners, Aker BP is now delivering in line with the politicians' expectations. Although Aker BP is the largest privately owned taxpayer in Norway, we're actually a small business. We will be drawing on the entire value chain to carry out these developments. Yggdrasil and Valhall PWP-Fenris are possible thanks to the world-class Norwegian industry that can deliver complex oil and gas projects. Many of these companies will also take Norway into new value chains."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).