Full steam ahead on the Norwegian Continental Shelf

The activity level in the Norwegian petroleum industry is still high. Exploration activity has the last few years increased substantially and several new discoveries are being made. The Pension Fund is still growing, now approaching NOK 3000 billion. This is more than one million per family in Norway, says the Minister of Petroleum and Energy Terje Riis-Johansen.

The state’s net cash flow is estimated at NOK 265 billion for 2010. Company taxes and fees amount to NOK 156 billion. Income from the State Direct Financial Interest (SDFI) is estimated to NOK 96 billion and dividend from Statoil to NOK 13 billion. Next year’s cash flow is expected to reach NOK 288 billion.

In the national budget for 2011 the average oil price in 2010 and 2011 is estimated to NOK 485 per barrel. The demand for oil is expected to increase over the next years, especially driven by a substantial economic growth in non-OECD countries. On the supply side high oil inventories, expectations of increased oil production and spare production capacity in OPEC contribute to a steady oil price.

Total oil production (including NGL and condensate) is estimated at 2.2 million barrels a day in 2010. This is five percent down from 2009. While oil production declines, gas production is still increasing. Gas production in 2010 is expected at 105 billion standard cubic metres. Gas production currently represents approximately 45 percent of total Norwegian petroleum production, increasing in years to come.

In 2010 the petroleum investments (including investments in exploration) are expected to reach NOK 133 billion, increasing towards 2012.

The Norwegian supply industry depends on a high activity level on the continental shelf.  The industry generates employment and spin-off effects all across the country. Eight percent of the labour force is directly or indirectly employed by the petroleum industry. To sustain a high activity level we have to increase recovery from existing fields, develop new resources and explore for additional resources.  As we succeed, the industry will remain a driving force to the Norwegian economy, says Terje Riis-Johansen, says the Minister of Petroleum and Energy.

The total recoverable resources at the shelf amount to approximately 13.4 billion standard cubic meters oil equivalents. After 40 years of production, nearly sixty percent of the expected resources remain to be produced.

Source: Ministry of Petroleum and Energy

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