December 8, 2021

All-time high for Norway’s oil and gas production

Norway presently has 90 oil and gas-producing fields, however – inside a couple of years – it may rise to greater than 130.

Whereas the world is struggling to adapt to a altering local weather, the Norwegian petroleum business is booming. Diderik Lund, an economics professor on the College of Oslo, instructed the information company NTB that the federal government’s Covid reduction effort is the principle motive.

Throughout the first months of the Covid-19 pandemic, the Norwegian parliament gave the oil and gas firms tax breaks as a part of a beneficiant reduction package deal.

Critics, not least the Inexperienced Celebration, argued that the modifications within the tax system damage the transition to inexperienced vitality by making ‘unprofitable’ fossil-fuel initiatives worthwhile. They’ve requested the European Free Commerce Affiliation’s (EFTA) surveillance authority to look into the case, as a result of it could possibly be violating the EU guidelines on state help.

As an European Financial Space (EEA) member, Norway is a part of EU’s inside market.

Rystad Power, a consulting firm, instructed NTB it has not less than 58 upcoming initiatives – and it’ll quickly replace that checklist.

Harm by the low worth of oil and the pandemic, the business initially noticed a fast decline in initiatives, which might have been very tough for large firms like Aker and Kvaerner, who ship production services to the oil and gas firms.

Second solely to Russia

Norway is the most important supplier of gas to the EU after Russia. With the value of gas at a document high prior to now yr, the nation exported gas in October 2021 for greater than €7bn, additionally a document.

Up to now few years, the Norwegian authorities has provided a document variety of new exploration licenses to oil and gas firms. The brand new authorities that entered workplace final month stated it’ll proceed handy out licences, and the subsequent spherical might be in January.

Whereas there’s a rising demand in Norway for ending the issuing of latest licences, there’s a stable majority in parliament for persevering with the present follow. The federal government and the oil business argue that at this stage, a full cease may hurt the transition to extra renewables.

“If we were to say from one day to the other that we close down production from the Norwegian shelf, I believe that would put a stop to an industrial transition that is needed to succeed in the momentum towards net zero . . . So we are about to develop and transit, not close down,” prime minister Jonas Gahr Støre instructed the Monetary Instances.

However this argument is up for dialogue.

The SSB (Statistics Norway) said in a report that the financial penalties of an finish to new licences can be minor.

SSB researcher Ådne Cappelen instructed NTB that extra oil production may hurt the shift to a greener economic system, as a result of offshore wind and the burgeoning hydrogen business are competing for the identical employees.

Norway’s newly-appointed minister for oil and vitality, Marte Mjøs Persen instructed NTB that the rise in production is generally as a result of the large Johan Sverdrup oil discipline will attain peak production in 2024. She additionally added that extra fields don’t imply increased production, as a result of the brand new fields are smaller than the previous fields.

The European Fee was completely satisfied when Norway elevated their gas exports to Europe final month. However on the identical day that commissioner for vitality Kadri Simson praised Norway’s improve, the EU introduced in a report that it could work in the direction of banning exploration within the Arctic. Nearly all of Norway’s future gas and oil reserves are within the High North.

Norway is following the talk about gas and taxes carefully. The vitality crises have dramatically modified the federal government’s perspective.

The Norwegian minister for local weather, Espen Barth Eide, instructed media after final month’s Glasgow COP26 that gas might be part of the inexperienced answer, as a greater different than coal. “Therefore will Europe need Norwegian gas,” he added.

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