Norway Now Comfortably Europe's Top Gas Supplier
Norway’s position as Europe’s number one oil and gas producer has grown in prominence since Russia’s invasion of Ukraine.
That’s what a new BofA Global Research report noted, adding that Norway is now comfortably Europe’s number one gas supplier with more than 25 percent of market share.
“[Norway’s] proud track-record of fiscal stability, and more recent fiscal incentives, should deliver record project activity in 2022, underpinning multi-year investment activity and fresh production volumes beyond the end of the decade,” the BofA Global Research report stated.
“Yet we remain cautious on Norway’s OFS names, as we see earnings downgrades and capex upgrades at Subsea 7 (SUBC) and valuations that already reflect an order bonanza at Aker Solutions (AKSO). We are cautions too on Norway’s independent E&Ps, as we see record activity levels exacerbating inflationary pressures and genuine bottlenecks heightening the risk of timely project delivery,” the BofA Global Research report warned.
In the report, BofA Global Research noted that Equinor (EQNR) remains the company’s sole Norwegian Buy rating, “offering the cleanest exposure to our higher-for-longer European gas price thesis”. The report also revealed that BofA Global Research “see[s] a very limited risk of windfall taxes in Norway” but added that the company does highlight that fixed cash tax guidance by E&Ps will likely need to increase to reflect gas price strength over and above assumptions embedded in outdated corporate guidance.
In a separate BofA Global Research report sent to Rigzone back in July, the company highlighted that Norway had become Europe’s top gas supplier.
“We see a reliable partner too, with broad cross-party government support providing the industry a clear ‘licence to operate’,” the BofA Global Research report stated.
Preliminary production figures for September 2022 from the Norwegian Petroleum Directorate (NPD) showed an average daily production of 1.83 million barrels of oil, NGL and condensate. Total gas sales were 9.1 billion GSm3, the NPD revealed, adding that this was a decrease of 1.6 GSm3 to the previous month.
To contact the author, email andreas.exarheas@rigzone.com
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