NORWAY IS BETTER
According to REUTERS, a two-year crisis in Norway's oil industry may be ending and more companies are willing to invest, the head of the agency overseeing the country's oil and gas resources told.
The sector, which accounts for 20 percent of the Nordic country's economy, has been slashing jobs, costs and projects to cope with a 60 percent fall in oil prices since June 2014.
But the worst of the belt-tightening may be over and the industry could be turning a corner, the head of the Norwegian Petroleum Directorate, Bente Nyland, said in an interview.
"We are seeing that things are becoming better," she said, citing her talks with oil companies and an increased willingness to complete development plans.
Two development plans have been submitted so far in 2016, in this case by Statoil, and at least three more are expected before the year-end, she said. In January, the directorate had not been able to provide such an estimate.
The three expected are decisions on two fields in the Norwegian Sea - Statoil's Trestakk field and DEA's Dvalin gas discovery, formerly known as Zidane - and Centrica's Butch field in the North Sea.
Adding to the optimism is Norway's higher-than-expected oil and gas output so far this year. Nyland said there could be some upside to the NPD's production forecast for the year although the agency was not revising the number for now.
Challenges remain despite the improved outlook. Investment in the oil sector will fall to 150.5 billion crowns ($18.4 billion) in 2017 from 163.5 billion crowns this year, Statistics Norway said in a survey on Wednesday.
The NPD expects the number of new exploration wells next year to remain at this year's level of around 30, in a sign that oil companies remain cautious, Nyland said.
And the NPD chief is concerned about how oil companies' cost-cutting drive could hurt future production.
"What is critical to future production is how much more we can get from the fields, how much we can improve the recovery rates," she said. "If you shut wells, you can't get them up and running again."
Overall, Norway's oil and gas production is expected to stand at 3.65 million barrels of oil equivalent per day by 2020, down 7 percent on 2015.
To secure future production, Nyland and her team are pushing for oil firms to make sure extra capacity can be added to fields coming onstream.
One project the agency is monitoring is the Statoil-operated Johan Sverdrup field, the largest oil find off Norway for three decades, which will account for around 25 percent of Norway's petroleum output when reaching peak production. Output is due to start in 2019.
"For us, it is more important that Sverdrup is built with the capacity that can take the most oil and gas out," she said.
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