The steep decade-long decline in Norwegian oil output is leveling off
Substantial potential for improving recovery from mature fields, several small developments in the short and medium terms, and large oil discoveries makes the future look bright for the oil industry in Norway.
Petoro's accounts for first half 2012 shows the highest highest-ever net cash flow to the government from the State’s Direct Financial Interest (SDFI) on the Norwegian continental shelf (NCS).
According to a press release from Petoro, this totalled NOK 84.5 billion (USD 14 billion), up 24 per cent from first half of last year, despite the fact that oil prices fell below USD 90 per barrel for a short period in the early summer. Second quarter net cash flow was NOK 41.6 billion (USD 6,9 billion), up 22 per cent from the second quarter of 2011.
The strong results are mainly due to higher sales volumes and prices. Head of Petoro, Kjell Pedersen, regards the production result as an indication that the steep decade-long decline in Norwegian oil output is now leveling off.
“Looking further ahead, we see a substantial potential for improving recovery from mature fields. We will also have several small developments in the short and medium terms, and large oil discoveries such as Johan Sverdrup, Skrugard and Maria will be phased in over the next few years. That provides very good future prospects for the SDFI and the NCS as a whole,” says Kjell Pedersen, chief executive of Petoro.
Total oil and gas production for the second quarter averaged just over a million barrels of oil equivalent per day (boe/d), compared with 845 000 for the same period of 2011. Gas production was up by 30 per cent from the second quarter of last year, when several fields were shut down for planned maintenance. Production of oil and natural gas liquids (NGL) increased by seven per cent, again mainly because of fewer planned maintenance turnarounds than in 2011.