Gas boom on the Norwegian continental shelf

Troll A Gas PricesTroll A Plattform. By Swinsto101 - Own work, CC BY-SA 3.0,

Gas boom on the Norwegian continental shelf

Record-high gas production is the reason why production on the Norwegian continental shelf increased last year, despite a decline in oil volumes. The Norwegian Petroleum Directorate predicts it to increase for the next seven years.

 

Total production of petroleum on the NCS increased in 2017 for the fourth consecutive year. The predicted decline in oil production continues and will persist, but the gas weighs up. In 2017, 124.2 billion standard cubic meters of gas were sold, a Norwegian record for gas sales.

Petroleum Director Bente Nyland was very cheerful when she presented the results on Tuesday morning.

– Many have predicted the industry to decline drastically in recent years, but the fact is that there has been – and will be – profitable production in Norway for many years to come, says Nyland to NTB.

Oil out – gas in

Gas optimism is now so high that it is suggested that total production can reach the record level from 2004. The difference is that gas at the time accounted for most of the production, while production in 2023 will be about 50/50 oil and gas.

– This development is planned. We have kept gas production low, we wait with gas until oil has been taken out from a field. We have big fields like Ormen Lange and Troll which increase gas production and when the oil reserves is declining, more gas will be extracted at Oseberg for example, says Nyland.

Demand

In previous years gas production has been reduced somewhat due to low prices. Although gas prices have been difficult to predict, experts now expect them to stay at a good level.

– That such a big a market as China is now switching from coal to gas, clearly has ripple effects. What is seen in all countries is that the turning towards natural gas also goes faster than expected. The prices will never be as high as we hoped before shale gas and oil were found in the United States. But with today’s low cost of production, there are still good prospects, says investment director Stig Myrseth in Dovre Forvaltning.

Concern

At the turn of the year there were 85 producing fields on the Norwegian continental shelf. Five of these were put into production in 2017. Additionally plans for development and operation (PDO) for ten new projects were presented, while nine are under development. After a few years of decline, it appears that a further upturn is in store, with a more robust industry.

– The projects adopted today have generally good profitability and can withstand an oil price down to 30-40 dollars per barrel, says Nyland.

Her biggest concern is that it is not being explored and invested enough.

– If we want long-term high production on the shelf, we depend on the resources we have not yet discovered. This is largely in areas that require major political processes to be explored. At the same time, we have also made small discoveries, where it is becoming increasingly demanding to make independent developments because it requires another type of supplier industry and decisions to be made, says Nyland.

By 2018, the Norwegian Petroleum Directorate expects investments to be around NOK 122 billion, approximately at the same level as last year. In 2019, investment is expected to rise to just below NOK 140 billion.

 

© NTB Scanpix / Norway Today

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