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Norway to Cut Oil-Production Forecasts as Costs Delay Projects

By Mikael Holter Aug 26, 2014 Norway, western Europe’s biggest oil producer, will probably cut its long-term forecast for crude production as companies reduce spending to counter rising costs and improve shareholder returns. As investments in Norway’s oil industry fall after a peak this year, production beyond 2015 will be lower than expected, according to Bente Nyland, head of the Norwegian Petroleum Directorate. The estimate cuts are expected to be reflected in the NPD’s annual prognosis scheduled to be published in January. “There might be a certain decrease,” she said in an interview in Stavanger today. “It’s capital discipline, it’s costs.” Norway is struggling to sustain oil production that’s more than halved since a peak in 2000 as producers including Statoil ASA (STL) scale back spending plans. The NPD in its latest prognosis in January predicted oil production would rise this year and remain stable through 2018. Still, the […]

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Norwegian energy outlook strong

The Norwegian government could pull in $84 billion in taxes from the natural reserves yet to be developed in its territory, analysis from finds. Energy consulting group Wood Mackenzie said Tuesday it believes there are 10 billion barrels of oil equivalent discovered, but yet to be developed, in Norway. About 60 percent of that could be developed commercially, resulting in $84 billion in taxes and $22 billion in profits for the companies involved. Norway has more oil reserves than any other European country and is one of the largest suppliers of natural gas to the region. Wood Mackenzie analyst James Webb said "strict capital discipline" in Norway, however, means some large discoveries might not be developed. "Despite the obvious obstacles for development, the pipeline for future projects in Norway is strong," he said in a statement Tuesday. The National Petroleum Directorate, a government regulator, said preliminary production figures for […]

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Wood Mac: 10B Barrels of Undeveloped Resources on NCS

Norway has 10 billion barrels of oil equivalent of discovered hydrocarbons that are yet to be developed, according to new analysis released Tuesday at Stavanger’s ONS 2014 conference by Wood Mackenzie. Wood Mackenzie said that, despite being at different stages of evaluation, facing intense investor scrutiny and considerable technical and commercial challenges, more than 60 percent of these resources could be commercialized – potentially adding $106 billion to Norway’s oil and gas industry revenues. The oil and gas industry research firm said that the 10 billion barrels of oil equivalent of undeveloped resources are held with 206 discoveries – ranging in size from under one million boe to the giant 2.4 billion boe at Johan Sverdrup – and spread across the Norwegian Continental Shelf. James Webb, Wood Mackenzie’s upstream analyst for North West Europe, commented: "We consider 4.8 billion boe likely be economic, 1.6 billion boe potentially economic and […]

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Statoil to Supply Gas to Lithuania in Five-Year Deal

Lithuanian gas supplier Litgas said Thursday it has signed a five-year deal with Norway’s Statoil AS A to deliver 540 million cubic meters of natural gas annually from 2015, a move that could put an end to Lithuania being wholly dependent on Russian gas. "This strategic contract will help to ensure the availability of an alternative natural gas import source, which will enable us and other Lithuanian companies to procure natural gas on international markets from various suppliers at any time," said Dominykas Tuckus, general manager of UAB Litgas. The Baltic nation is currently dependent on Gazprom for 100% of its gas, and Lithuanians have been paying 15% higher than the European average gas price. Concerns about price and energy security have prompted Lithuania to lease a ship—dubbed ‘Independence’—that will allow it to process liquefied natural gas from non-Russian sources and deliver it to Lithuanian customers at potentially lower […]

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Norway oil fund sets out expansion plans

Norway’s $885bn oil fund is shaking up its top executives after criticism about its investment in Formula 1 and worries about how it will deal with its growing size. Norges Bank Investment Management, the arm of the central bank that manages the fund, will double the number of top executives to 12, creating new positions for compliance and several in its nascent property portfolio. More On this topic IN Capital Markets Three chief investment officers will be appointed to take over the asset allocation responsibilities currently held by chief executive, Yngve Slyngstad. “We are moving in the direction of trying to exploit the fund’s characteristics more clearly,“ Mr Slyngstad said to explain the move to three CIOs for allocation, asset and equity strategies. The CIOs will deal with both equities and bonds as well as benchmark indices increasingly tailored for the fund and its long-term outlook. The shake-up is […]

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Statoil formally opens new production platform

Norwegian oil company Statoil said Tuesday the nation’s prime minister attended a ceremony for the launch of its first new regional oil platform in nine years. Norwegian Prime Minister Erna Solberg opened the Gudrun platform in the North Sea , the first new oil platform operated on the Norwegian continental shelf since 2005. "Gudrun has proven that we are able to take our industry into a new era with global competition and local value creation," Statoil Chief Executive Officer Helge Lund said in a statement. Statoil, alongside its partners at French energy company GDF Suez and Austria’s OMV, said the field should produce as much as 184 million barrels of oil and gas equivalent over its lifespan. Discovered in 1975, the Norwegian company described it as a megaproject, representing more than $1.9 billion in investments. Initial production from Gudrun is estimated at 30,000 barrels of oil equivalent per day. […]

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Norway’s oil production up 8 percent

The National Petroleum Directorate, a government regulator, said preliminary production figures for July show an average daily production of 1.93 million barrels of oil, natural gas liquids and condensate, about 8 percent more than was produced in June. Around 80 percent of that production volume was crude oil. The NPD said oil production was 2 percent higher than what it expected for July, but 3.5 percent lower year-on-year. Technical problems at three fields — Draugen, Skuld and Valhall — were blamed for the decline, though NPD said oil production was still about 1 percent higher for the year than anticipated. Norway has more oil reserves than any other European country. Last year, it exported 1.19 million bpd worth of oil, with most of that headed to the British and Dutch economies. Total gas sales from Norway were about 282 billion cubic feet in July, around 7 percent more than […]

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Norway's oil production up 8 percent

The National Petroleum Directorate, a government regulator, said preliminary production figures for July show an average daily production of 1.93 million barrels of oil, natural gas liquids and condensate, about 8 percent more than was produced in June. Around 80 percent of that production volume was crude oil. The NPD said oil production was 2 percent higher than what it expected for July, but 3.5 percent lower year-on-year. Technical problems at three fields — Draugen, Skuld and Valhall — were blamed for the decline, though NPD said oil production was still about 1 percent higher for the year than anticipated. Norway has more oil reserves than any other European country. Last year, it exported 1.19 million bpd worth of oil, with most of that headed to the British and Dutch economies. Total gas sales from Norway were about 282 billion cubic feet in July, around 7 percent more than […]

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Greenpeace claims edge over Statoil

A decision by Statoil to end a campaign in the arctic waters of the Barents Sea shows it never should have drilled there in the first place, Greenpeace said. Norwegian energy company Statoil said it ended its campaign in the frontier Hoop area of the Barents Sea. Small volumes of hydrocarbons were encountered, but nothing in the way of a commercial discovery. The drilling program was the target of a Greenpeace protest aimed at highlighting the risks of operating in the pristine arctic environment. The Hoop reserve area is near Bear Island, a unique island ecosystem that Greenpeace said would be spoiled should a spill occur in the area. Truls Gulowsen, director of the Norwegian branch of Greenpeace, said dry wells in the Hoop area suggest it’s the arctic environment itself that’s rejecting the presence of oil companies like Statoil. "The licenses should never have been awarded in the […]

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Rosneft Moves to Thwart EU Sanctions With Norwegian Rigs

A Norwegian drill rig owner is supplying Russian oil giant OAO Rosneft (ROSN) and Exxon Mobil Corp. with the kind of high technology that will be barred under U.S. and European Union sanctions taking effect as soon as tomorrow. Though the EU said it will deny export licenses for equipment intended for deep-water and arctic oil production, Rosneft’s six rig leases from Seadrill Ltd. (SDRL) ’s North Atlantic Drilling (NADL) unit, signed July 29, appear to thwart sanctions intended to block Russian oil companies from obtaining Western drilling expertise. Seadrill’s unit can proceed with the Rosneft contracts, worth $4.25 billion, because they were signed before the sanctions take effect, said Rune Magnus Lundetrae, Seadrill’s chief financial officer. The drilling contracts show how the latest round of international sanctions may have only minimal impact on Russia ’s oil industry, at least in the short-term. “This is not exactly a full, […]

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