Norway Isn’t Giving Up On New Oil Development

Norway is betting on offshore wind, hydrogen, and electrification to meet its commitment under the Paris Agreement, but its oil and gas sector will continue to play a major role in long-term job creation, economic growth prospects, and value for the country, the government said on Friday.

Norway, Western Europe’s largest oil producer, is preparing to face the energy transition, yet it believes that it can develop its petroleum resources to deliver low-emission production within its climate policy, the government’s White Paper ‘Putting Energy to Work’ showed.

“Retaining expertise and technologies in the oil and gas sector is also vital for the development of new industries and technologies such as carbon capture and storage, offshore wind and hydrogen,” Minister of Petroleum and Energy, Tina Bru, said in a statement.

“The main goal of the government’s petroleum policy - to facilitate profitable production in the oil and gas industry in a long term perspective - is firmly in place,” she added.

According to the Norwegian government, the domestic oil and gas industry currently faces two major challenges—maturing oilfields and increasing demands for lower emissions.

“The petroleum sector will remain a significant factor in the Norwegian economy in the years to come, although not on the same scale as today. The government will facilitate long-term economic growth in the petroleum industry within the framework of our climate policy and our commitments under the Paris Agreement,” the government said.

Norway has become yet another oil-producing country that has said it would not stop investing in oil and gas since the International Energy Agency suggested in a report last month that the world wouldn’t need new investment in fossil fuels ever if it wants to achieve net-zero in 2050.

The Norwegian Oil and Gas Association has also commented on the IEA report, saying that it “does not share the assumption that Opec members alone should account for more than half of oil and gas production for the world market in a 2050 perspective. If demand does not decline as rapidly as the IEA assumes in its scenario, and the supply side is simultaneously choked off, global energy provision could be threatened and lead to very high energy prices.”

By Charles Kennedy for Oilprice.com

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