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Shell May Close Norway Field a Decade Before Target on Oil Slump

Royal Dutch Shell Plc (RDSA) may close its Draugen oil field in the Norwegian Sea a decade earlier than in a prior assessment of the area’s potential lifespan because of rising costs and a slump in oil prices . Europe’s biggest oil company expects production in the field to extend until 2024 to 2027 after previously estimating a potential of as long as 2036, Odin Estensen, an asset manager at its Norway unit, said yesterday in an interview in Stavanger. “It’s becoming more and more difficult to keep these tail-end fields going,” he said. The cost of operations and upgrades has risen and “when you put the oil-price on top of that, the picture is clear: we’re under pressure,” Estensen said. Shell is among oil companies reining in spending as higher costs in the past decade eroded returns, delaying projects. Oil prices, down by about a third since June, […]

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Oil Workers Earning $179,000 Expose Norway to Crude Crash

Print Back to story Norway , where oil helped create one of the world’s most stable and prosperous societies, finds itself among the most exposed to falling crude prices. Though the blessings of energy wealth have hardly turned to a curse, the industry’s highest labor costs, which saw the average offshore worker earn $179,000 last year, threaten to curb investment as oil tumbles. In August, Helge Lund, chief executive officer of state oil company Statoil ASA (STL) , remarked that while $100-a-barrel oil once provided an excuse for champagne, it now barely covered the expense of new projects. Two months later, with crude hovering near $85 a barrel and Lund, the leading figure in Norway’s oil industry for 10 years, moving to a smaller British competitor, lower prices risk undermining economic growth and cutting tax receipts. Norway has already been coping with 13 years of production declines from its […]

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Low gas for Statoil big win for Greenpeace

Greenpeace says it’s vindicated after Statoil turns up low gas volumes in frontier arctic drilling campaign. (Photo: Greenpeace) OSLO, Norway, Oct. 10 (UPI) — A small natural gas discovery in the arctic Barents Sea waters by Norway’s Statoil shows the risky campaign isn’t worth it, Greenpeace said Friday. The Norwegian Petroleum Directorate characterized a discovery in a wildcat well in the Johan Castberg area of the Barents Sea as a small find for the Norwegian energy company . A wildcat well is one drilled into an area not known previously to contain oil or gas reserves. Erlend Tellnes, a Greenpeace campaigner, said the announcement of low gas volumes was a victory for the environment. "Statoil unsuccessful drilling campaign in the Barents Sea shows that the strategy to be more aggressive in the Arctic has been unsuccessful," the campaigner said in a statement emailed to United Press International. More than […]

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Norway preparing to open new energy frontiers

Norwegian energy company Statoil working with partners on assessing energy data in Barents Sea. UPI/A.J. Sisco.. STAVANGER, Norway, Oct. 2 (UPI) — Norwegian energy company Statoil said Thursday it was making strides in opening up new exploration areas in the Barents Sea. The company announced it finished a seismic survey program in the southeastern waters of the Barents Sea through a multilateral process. Statoil said new forms of cooperation in that field translate to a more efficient way to acquire data . "This warrants rethinking and exploring new business approaches and forms of cooperation in order to reduce costs and work more efficiently also elsewhere," Jan Helgesen, Statoil’s head of geophysical operations, said in a statement. The company said data would be ready for review by late 2015. This in turn would help with a licensing round for the southeastern Barents Sea, the first new area opened up on […]

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Putin Not a Big Enough Threat to Undermine Europe, Norway Says

Europe shouldn’t fear the economic fallout of deteriorating ties with Russian President Vladimir Putin, Norway ’s Prime Minister Erna Solberg said. “Russia isn’t such a large economy so it doesn’t have that big an impact on our European economy,” Solberg, 53, said yesterday in an interview at her office in Oslo. While sanctions and counter sanctions have hurt primarily the fishing industry, there’s still “good growth in Norway,” she said. Europe has watched its economic growth slow as Russia’s handling of Ukraine poisons trade relations. Norway, which isn’t a European Union member, backs U.S. and EU economic sanctions that have pushed Russia’s $2 trillion economy to the brink of recession. Investors have responded by pulling capital, sending Russia’s benchmark Micex index down 6.7 percent this year. Russia has retaliated with its own trade bans, including stopping salmon imports from Norway, the world’s largest salmon exporter. Norwegian salmon farmers shipped […]

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We’re the gas answer, Norway tells Europe

European Energy Commissioner Gunther Oettinger sees Norway as essential part of energy security puzzle. (CC/Jacques Grießmayer) BRUSSELS, Sept. 26 (UPI) — Norwegian Energy Minister Tord Lien said his country has the resources and infrastructure in place to serve as a steady partner in the European energy sector. Lien met in Brussels with European Energy Commissioner Gunther Oettinger during a bilateral energy conference . Lien said less than 30 percent of the natural gas available on the Norwegian continental shelf has been produced, meaning Norway can be a reliable partner for the European community for decades to come. "We have both the infrastructure and the resources to remain a stable supplier of natural gas to Europe for decades to come," he said in an address Thursday. "Our production has grown more or less uninterrupted for 20 years." Norway last year sent 92 percent of its oil exports and at least […]

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BASF Buys Oil, Gas Assets From Statoil to Secure European Supply

BASF SE (BAS) ’s oil and gas arm agreed to buy assets from Norway’s Statoil ASA (STL) for $1.25 billion, diversifying energy supplies for Germany’s biggest chemical maker as relations between Europe and Russia worsen. BASF’s Wintershall is acquiring a share in two producing fields, two development projects, the Polarled pipeline project and a share in four exploration licenses, the Ludwigshafen, Germany-based company said today in an e-mailed statement. Wintershall’s daily production in Norway will increase 50 percent to about 60,000 barrels of oil equivalent. The Norwegian deal will make BASF, Germany’s largest industrial user of gas, less reliant on supplies from Russia as the U.S. and European Union ratchet up sanctions in response to the conflict in Ukraine. An asset swap with OAO Gazprom (OGZD) , agreed to in 2012 and expected to close this autumn, was set to boost Russia’s share of BASF’s supply to more than […]

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Norway Losing Out to Sweden in $6 Billion Wind-Power Boom

Divergent tax policies mean Norway risks missing out on most of a $6 billion wind-power boom while neighboring Sweden benefits. Norway, which aims to triple wind capacity by the end of the decade, has erected one turbine for every seven installed in Sweden since the countries signed a pact to share renewable production two years ago. Norway, western Europe’s biggest oil and gas producer, has so far installed less than 10 percent of what it’s expected to complete by 2020 under the accord. The countries’ mismatched tax rules threaten to deny Norway investment in an industry where jobs will triple by 2030, according to the European Wind Energy Association in Brussels. While Statkraft AS, Norway’s state-owned power company, didn’t build any wind projects in its home country in the eight years through 2013, it spent as much as 7.5 billion kroner ($1.2 billion) on turbines in Sweden. “Changes must […]

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Statoil cleared to move controversial rig

Norway’s Petroleum Safety Authority said the company received consent to move the Transocean rig, Spitsbergen, to a license area in the Barents Sea, where the water depth is approximately 1,400 feet. "In its decision to grant permission under the Pollution Act, the Norwegian Environment Agency has determined that Statoil may not drill in oil-bearing strata before Sept. 18," the regulator said. "This condition has been set to allow for appeals before the riskiest part of the operation gets under way." More than a dozen Greenpeace demonstrators took part in a protest against Statoil’s drilling plans for arctic waters by boarding the Transocean rig in May. Around half of them surrendered their campaign voluntarily and Statoil said the seven activists who remained behind were arrested by Norwegian police . Greenpeace said drilling operations in the region present a threat to regional species and the environment. Statoil in August abandoned an […]

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