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2018-01-31 10:40:00

NORWAY'S OIL BOOM

NORWAY'S OIL BOOM

BLOOMBERG- A rally in the price of black gold is giving Norway another fix.

With crude back at $70 a barrel, and a petroleum industry that cut costs to the bone after the oil crash, the stage is now set for another boom. But the good times could hamper Prime Minister Erna Solberg's main aim of moving the economy away from a reliance on oil. As optimism now returns to the economy, signs of real progress on that project are few.

"Ideally, in terms of long-term sustainability, we would like to see a substantial increase in mainland investments, that the new industries that have lived in the shadow of the oil sector get a real boost," said Kjersti Haugland, chief economist at DNB ASA, Norway's largest bank. "Based on the macro data that we now have, we can't say that the Norwegian economy has gone through a massive transitioning."

Half the Kingdom
Offshore industry accounted for more than half of Norway's exports of goods in 2017

Norway's Petroleum Directorate now predicts oil investments will rise this year for the first time since 2014 and that output will test another peak in 2023 as new fields start pumping. The real economic risks will appear after that, if the economic transformation hasn't seen more progress. After 40 years of production, Norway's biggest oilfields are being depleted and recent exploration in its Arctic waters has been disappointing.

"We know that the force of the oil industry in the Norwegian economy has been reduced and will be lower than what we've been used to," Finance Minister Siv Jensen said in an interview this month in Oslo. "Yes, it's an important industry for Norway, but it's definitely important that we get more legs to stand on."

Mainland Momentum?
Mainland investments have had a hard time gathering pace amid oil drop

Norway was hit by an economic shock in 2014 when the price of oil more than halved in less than a year, prompting central bank Governor Oystein Olsen to warn that "winter is coming." More than 50,000 jobs were lost in the offshore sector, but the government kept the economy afloat by dipping directly into the nation's $1 trillion sovereign wealth fund for the first time to stimulate growth and plug budget holes.

The mainland economy is also dependent on currency traders. Selling off along with oil prices over the past few years, the weakening currency has been key in boosting exports.

"It's important to keep the currency fairly weak, it's a supporting factor along the way," said Haugland. "We'll see an upturn in the oil industry now, but there's no reason to expect that we'll return to the massive lift that we saw before the oil price drop."

Rising Again
Petroleum sector share of Norway's economy and state revenue is recovering

The hardest blow from the downturn was felt in the oil region stretching along the country's southwest coast. From its headquarters in the oil capital Stavanger, the region's biggest bank SpareBank 1 SR-Bank, is seeing some local companies rejigging their businesses away from oil.

For example, Statoil ASA, now plans plan to plow one third of its investments into renewable energy by 2030. "What Statoil is now doing by expanding its business model is interesting, it's easy to look at Norway as an oil and gas nation, but we're really an energy nation," said Kyrre Knudsen, chief economist at SpareBank 1 SR-Bank.

Also searching for more legs to stand on is a company like Coast Center Base. Established at the beginning of the Norwegian oil adventure in the 1970s, the company has catered to offshore operations by supplying goods and repairing rigs. It's now looking to get into businesses such as carbon capture and wind power.

"Instead of fighting against changes, you need to swim with the current," Kurt Rune Andreassen, the company's chief executive officer, said in an interview this month.

The head of lending to large companies at DNB says the last few years should be viewed as a wake-up call.

"I think in many ways that the oil price drop three years ago was a blessing in disguise," Harald Serck-Hanssen said in an interview. "It gave us a warning of how it will be like living in a less oil-dependent economy, and it gave many companies the opportunity to adapt."

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Earlier:

 W.Europe
2018, January, 24, 11:30:00

NORWAY'S OIL UP OF 26 TBD

NPD - Preliminary production figures for December 2017 show an average daily production of 1 932 000 barrels of oil, NGL and condensate, which is an increase of 26 000 barrels per day compared to November.

 

 W.Europe
2018, January, 4, 12:20:00

NORWAY'S GAS RECORD

REUTERS - Norway’s pipeline gas exports to Europe hit a record high in 2017, exceeding the previous year by almost 7 percent, preliminary data from the country’s offshore gas systems operator Gassco showed on Tuesday.

 

 W.Europe
2018, January, 3, 15:35:00

NORWAY'S OIL PROBLEMS

BLOOMBERG - Norway’s oil production has been halved since a 2000 peak. While natural-gas output has surged, total production is forecast to fall again in the middle of the next decade. A flurry of investment decisions at the end of last year hides a painful truth: after Statoil’s $6 billion Johan Castberg oil field starts production in the Barents in 2022, the project pipeline is scant.

 

 W.Europe
2017, December, 20, 19:10:00

NORWAY'S FENJA INVESTMENT NOK 10 BLN

NPD - On Tuesday, the licensees, led by operator VNG, submitted a Plan for Development and Operation (PDO) for Fenja in the Norwegian Sea. Investments are expected to total approx. NOK 10 billion.

 

 W.Europe
2017, November, 22, 11:20:00

NORWAY'S PRODUCTION UP TO 1.9 MBD

NPD - Preliminary production figures for October 2017 show an average daily production of 1 901 000 barrels of oil, NGL and condensate, which is an increase of 141 000 barrels per day compared to September.

 

 W.Europe
2017, November, 20, 09:00:00

NORWAY SELLS OIL & GAS

Norway, which relies on oil and gas for about a fifth of economic output, would be less vulnerable to declining crude prices without its fund investing in the industry, the central bank said Thursday. The divestment would mark the second major step in scrubbing the world’s biggest wealth fund of climate risk, after it sold most of its coal stocks.

 

 W.Europe
2017, August, 31, 12:10:00

U.S. WANT NORWAY

Norway’s $970-billion sovereign wealth fund, the world’s largest, should allocate a bigger share of its investments to renewable energy to boost returns, a U.S. energy policy think-tank said

 

 

Tags: NORWAY, OIL, GAS

Chronicle:

NORWAY'S OIL BOOM
2018, August, 17, 11:30:00

U.S. INDUSTRIAL PRODUCTION UP 0.1%

U.S. FRB - Industrial production edged up 0.1 percent in July after rising at an average pace of 0.5 percent over the previous five months. Manufacturing production increased 0.3 percent, the output of utilities moved down 0.5 percent, and, after posting five consecutive months of growth, the index for mining declined 0.3 percent. At 108.0 percent of its 2012 average, total industrial production was 4.2 percent higher in July than it was a year earlier. Capacity utilization for the industrial sector was unchanged in July at 78.1 percent, a rate that is 1.7 percentage points below its long-run (1972–2017) average.

NORWAY'S OIL BOOM
2018, August, 17, 11:25:00

NORWAY'S PETROLEUM PRODUCTION: 1.911 MBD

NPD - Preliminary production figures for July 2018 show an average daily production of 1 911 000 barrels of oil, NGL and condensate, which is an increase of 64 000 barrels per day compared to June.

NORWAY'S OIL BOOM
2018, August, 17, 11:20:00

GAZPROM NEFT NET PROFIT UP TO 49.6%

GAZPROM NEFT - For the first six months of 2018 Gazprom Neft achieved revenue** growth of 24.4% year-on-year, at one trillion, 137.7 billion rubles (RUB1,137,700,000,000). The Company achieved a 49.8% year-on-year increase in adjusted EBITDA, to RUB368.2 billion. This performance reflected positive market conditions for oil and oil products, production growth at the Company’s new projects, and effective management initiatives. Net profit attributable to Gazprom Neft PJSC shareholders grew 49.6% year on year, to RUB166.4 billion. Growth in the Company’s operating cash flow, as well as the completion of key infrastructure investments at new upstream projects, delivered positive free cash flow of RUB47.5 billion for 1H 2018.

NORWAY'S OIL BOOM
2018, August, 15, 11:10:00

OIL PRICE: NEAR $72

REUTERS - Front-month Brent crude oil futures LCOc1 were at $72.34 per barrel at 0648 GMT, down by 12 cents, or 0.2 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 23 cents, or 0.3 percent, at $66.81 per barrel.

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