Norway To Boost Oil & Gas Production As It Expects Record 2023 Revenue

Authored by Charles Kennedy via OilPrice.com,

Western Europe’s biggest oil and gas producer, Norway, expects its oil and liquids production to rise by 15% next year with the second phase of the Johan Sverdrup oilfield development and the start-up of the Johan Castberg oilfield, the government said in its draft budget on Thursday.

Natural gas production in Norway, which supplies around 25% of the gas consumed in the EU and the UK, is expected to rise by 8 percent in 2022 compared to 2021, the government’s latest estimates showed.

“The energy crisis in Europe makes Norwegian gas sales even more important for Europe than before,” Norway says.

Revenues from petroleum activities are expected at $132 billion (1.4 trillion Norwegian crowns) – a record high – in 2023, compared to an expected $113 billion (1.2 trillion crowns) for 2022, and nearly five times higher than the 2021 revenues from oil and gas, according to the government’s budget draft. The high expected income from petroleum activities will mostly reflect expected high oil prices, and especially gas prices, as well as a weaker exchange rate for the Norwegian crown.

Earlier this year, Norway’s authorities approved applications from operators to boost production from several operating gas fields, to allow higher gas production as its key partners, the EU and the UK, scramble for gas supply ahead of the winter.  

The new oil and gas development projects will help Norway maintain a relatively high level of oil and gas production until 2030 and continue to be a stable energy supplier to Europe, Norway’s Minister of Petroleum and Energy, Terje Aasland, said, commenting on the budget.

However, Norway needs continuous efforts from operators on the shelf to increase production, develop new fields, and make new discoveries in order to offset a natural decline in production from operating oil and gas fields over time, Aasland said.