Norway to Step Up Oil Exploration to Counter Future Oil Dilemma

Crude oil production in Norway has been slipping for the past years, prompting Torgrim Reitan, Statoil’s CFO, to announce that the country should come up with oil and gas finds at least once every two years from now until the 2020s. At this rate, new oil finds may possibly help arrest Norway’s dwindling oil production.

Reitan disclosed that there is enough oil production within the long term but estimates that, beyond 2020, the picture wouldn’t be that rosy.

The oil giant and fellow oil and gas firms have been responsible for bringing in more than $60 billion of energy profits to Norway for the year 2011 alone. Of course, a more than $100 crude oil price per barrel average during the same year was an added boon for country’s oil sector.

In addition, Norway is relatively debt-free and has huge oil funds that in the billions of dollars.

Experts, however, warn that this scenario wouldn’t last long. In about 10 years or so, oil production will taper off unless the country acquires additional acreage and, more importantly, significant oil discoveries.

Statistics show that the country’s oil output has gone down by approximately 50 percent from 2000 output volumes. However, it’s noteworthy to mention that the growth in natural gas production during almost the same period has softened the impact of oil production slippages.

From Statoil’s standpoint, oil output will start to dwindle more rapidly beyond 2020.

Statoil’s CFO commented further that, to counter Norway’s possible production dilemma, it will have to make discoveries as big as the Johan Sverdrup oil find – one of the top five oil finds ever made in the Norwegian shelf.  Globally, this discovery was the biggest recorded ever in the year 2010.Said oil field holds an estimated 1.8 billion barrels of crude oil.

Other significant discoveries in the past include the Havis and Skugard which may, collectively, hold up to 600 million barrels of oil. Reitan is quick to note that these past finds, despite their magnitude, aren’t enough. Norway shouldn’t rest on its laurels because Ekofisk and Gullfaks, two of its more mature oil fields, are already on a decline.

Add to this is the fact that Norway’s oil profits now are traced to past big oil finds and that the current crude oil prices have contributed much to its overall gains.

For 2013, Statoil is set to drill once again within the Barents Sea.  It plans to kick off with drilling four oil wells and exploring five more before the close of the year.