STAVANGER (Dow Jones Newswires), Jan. 16, 2012
Norway's total oil and gas production fell by 5% in 2011, to 218.7 million cubic meters of oil equivalent, the Norwegian Petroleum Directorate said Monday.
The fall was largely driven by lower gas production, the directorate said.
Norway exports most of its petroleum production. Total Norwegian production of oil and gas has been falling since 2004, mainly because of lower output of crude oil. The role of the Norwegian Petroleum Directorate is to get as much petroleum out of the shelf as possible.
The directorate is "worried that the number of new production wells falls," said Director Bente Nyland at a Stavanger press conference on Monday. This is the best method of increasing production in existing fields, and oil companies are "expecting a larger production" than what one should expect from the number of wells they plan to drill, she said.
The directorate expects production to rise in 2012, to 222 million cubic meters of oil equivalent, holding steady at this level until 2016.
Norwegian 2011 crude oil production fell to 97.3 million cubic meters, or 1.7 million barrels a day, from 104.4 million standard meters in 2010.
Natural gas sales fell to 101.3 billion cubic meters, 5 billion cubic meters less than in 2010. The directorate said this was "largely market driven."
"We think this is a temporary dip," said Nyland, adding she expects a rise in Norwegian natural gas sales in the next five years.
Norwegian 2011 crude oil production fell to 97.3 million standard cubic meters from 104.4 million standard cubic meters in 2010, while natural gas sales fell to 101.3 billion standard cubic meters, 5 billion standard cubic meters less than in 2010, the directorate said.
Investments in the oil sector, including exploration, are expected to rise to NOK170 billion in 2012 from just under NOK150 billion in 2011, the directorate said. But "a sharp and prolonged decline in the price of oil could have a major impact on investments," it added in a statement.
Recent, big Norwegian discoveries such as Skrugard and Aldous/Avaldsnes will "not increase Norwegian petroleum production," said Deputy Energy Minister Per Rune Henriksen at the press conference, adding that "our goal is stable, high production and to dampen the production fall we know will come."
For the five-year period up to 2016, production is expected to be 1,120 million cubic meters of oil equivalent, the directorate said. For the five years 2007-2011, production was 1,170 million cubic meters of oil equivalent, it said.
In the next five years, Norway will produce 458 million standard cubic meters of crude oil, 110 million standard cubic meters less than in the previous five year-period, according to the directorate.
One cubic meter is 6.29 barrels of oil equivalent.
Copyright (c) 2012 Dow Jones & Company, Inc.
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