NPD: 2017 Set to be Another Demanding Year
The next 12 months will be yet another demanding year for the industry, according to the Norwegian Petroleum Directorate, although the decline in investments is slowing.
“Investments are expected to rise gradually following a minor drop from 2017 to 2018,” the NPD said in a statement on its website.
“The drop in investments is partially due to lower activity, but is also a consequence of the reduced cost level. The start-up of a number of new projects, both on fields currently in operation as well as new field developments, is expected to contribute to greater investments starting in 2019,” the NPD added.
Oil production increased for the third consecutive year in 2016, with gas production remaining at the same level as the previous year, which was a record year for production. The high level was in part due to good regularity on the fields, and various efficiency measures which led to substantial reductions in operating and exploration costs, according to the NPD.
“The foundation has been laid for increased profitability in both existing and new projects. This is essential in order to maintain a high activity level for upcoming years,” NPD Director General Bente Nyland said.
“We must prevent the focus on short-term profits from coming at the expense of long-term value creation for society,” she added.
Investments on the Norwegian shelf in 2016 amounted to $15.8 billion (NOK 135 billion), which was around $5.8 billion (NOK 50 billion) less than the peak years of 2013 and 2014.
Thirty-six exploration wells were drilled in 2016, 20 fewer than the preceding year. Eighteen discoveries were made, one more than in 2015. Exploration activity was highest in the North Sea, where a total of 14 discoveries were made. Two discoveries were made in both in the Norwegian Sea and the Barents Sea.
“Many of the discoveries are small, but most are located near existing infrastructure. This means that they can quickly become profitable developments if they are tied in to operational fields and facilities,” Nyland said.
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