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Norway’s oil and gas market grows – NGOs call for phase-out
The major factor driving the market is the increasing development of new oilfields in the country over the forecast period 2021–2025.
Business Wire reports that “the development of new oilfields is likely to drive the market over the forecast period. The discovery of new small oilfields is likely to provide an opportunity for the upstream oil and gas companies operating in Norway in the near future. The availability of oil reserves and increasing investment in the upstream sector are likely to drive the market over the forecast period. Norway is one of the largest oil producers and exporters in the European region. In 2019, the country’s crude oil production was 1437 thousand barrels per day, which accounted for about 47.9 per cent of Europe’s total crude oil production. The average offshore rig count was 16 in 2020.
The major oilfields in the country are reaching maturity and as a result Norwegian oil production has declined significantly since 2016. However, in January 2021, about 30 companies have received offers of ownership interests in a total of 61 production licences (34 in the North Sea, 24 in the Norwegian Sea, and 3 in the Barents Sea) on the Norwegian Shelf in the system of Awards in Predefined Areas (APA) 2020. Hence, with the award of 61 new production licences, the upstream segment is likely to make more profitable discoveries on the Norwegian shelf during the forecast period.
Moreover, Johan Sverdrup oilfield, the third-largest oil field on the Norwegian continental shelf, operated by Equinor, announced its plan to increase its daily production capacity to 535,000 barrels of oil by mid-2021. Also with expected resources of 2.7 billion barrels of oil, the field is one of the most important industrial projects in Norway for the next 50 years. Phase 1 of the field was opened in October 2019, and phase 2 is scheduled to begin production in Q4 of 2022.
Some of the major fields that are expected to come on stream during the forecast period are the Johan Sverdrup oilfield, Martin Linge, and Johan Castberg. New and upcoming oil field discoveries and the expansion of existing oil fields are therefore likely to reverse the trend and register significant growth in the market over the forecast period.
Norway holds the largest share in terms of total oil reserves among the European countries. According to the Norwegian Petroleum Directorate, there are around 8 billion standard cubic metres of oil-equivalent (Sm3 o.e.) resources (oil and gas) remaining on the Norwegian continental shelf (NCS), of which 52 per cent (4.2 billion Sm3 o.e.) of resources are proven, as of February 2021. The production on the Norwegian shelf in 2020 was 229 million Sm3 o.e.
Around 43 per cent of the remaining resources are concentrated in the North Sea. The distribution of the rest indicates that 38 per cent are in the Barents Sea and 19 per cent are in the Norwegian Sea. In the Barents Sea, large parts of the remaining planned resources are not confirmed. At the end of 2020, there were 67 producing fields in the North Sea, 20 producing fields in the Norwegian Sea, and two producing fields in the Barents Sea.
As of December 2020, the estimated total unproven resources were 665 million Sm3 o.e., 665 million Sm3 o.e. and 2,505 million Sm3 o.e. in the North Sea, Norwegian Sea, and the Barents Sea respectively. Hence, with the abundance of proven and unproven resources in the country, the oil & gas upstream sector is likely to witness significant growth over the forecast period. ”
The Norwegian environmental movement is very actively campaigning to phase out oil and gas production in Norway, and has called for international help to achieve this target.
Compiled by Reinhold Pape
Business Wire, 27 April 2021, Norway Oil and Gas Upstream Market Growth, Trends, COVID-19 Impact, and Forecasts Report 2021-2026, https://www.businesswire.com/news/home/20210427005537/en/Norway-Oil-and-...
Greenpeace, 22 January 2020, Outrage after judgement in favour of the Norwegian oil state, https://www.greenpeace.org/international/press-release/46140/outrage-aft...
Friends of the Earth Europe, 16 January 2018, Norway bars arctic oil drilling in pristine Lofoten islands, https://friendsoftheearth.eu/news/norway-bars-arctic-oil-drilling-in-pri...