• 3 minutes Marine based energy generation
  • 5 minutes "Saudi Armada heading to U.S.", "Dumping" is a WTO VIOLATION.
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Which producers will shut in first?
  • 1 min A small trial finds that hydroxychloroquine is not effective for treating coronavirus
  • 14 mins The GREAT OPEC+ Agreement
  • 2 hours US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again
  • 9 mins Trumps Oil Industry....
  • 9 hours Saudis to cut 4mm bbls. What a joke.
  • 9 hours Saudi Arabia Is Buying Up European Oil Majors
  • 6 hours Trump will be holding back funds that were going to W.H.O. Good move
  • 4 hours Chinese Communist Party
  • 4 mins Ten days ago Trump sent New York Hydroxychloroquine. Being administered to infected. Covid deaths dropped last few days. Fewer on ventilators. Hydroxychloroquine "Cause and Effect" ?
  • 8 hours Russia's Rosneft Oil is screwed if they have to shut down production as a result of glut.
  • 10 hours Occidental hypocrisy
  • 4 hours Corona Price Tag
  • 13 hours Sharp real pure true hard working roughneck needing work..

Norway Unfazed By Drop In Oil Prices

Norway Unfazed By Drop In Oil Prices

There’s no doubt that, like other major energy-producing countries, Norway faces challenges from the plunge in oil prices. But state-owned Statoil says its can continue to be profitable through partnerships with other oil companies and developing more “fast-track projects.”

The price of Brent crude, a benchmark oil that’s harvested by Norway and its neighbors, has dropped $35 from its record high in June to below $80. This cuts into profits and limits oil companies’ investments, especially in expensive ventures such as Arctic drilling.

Should Norway be concerned about drilling farther north in its Barents Sea, which holds an estimated 40 percent of the country’s energy resources? Exploiting the region has long been viewed as a way to end a decline in the country’s production of crude for more than a decade.

Related: Statoil Hits North Sea Oil Bonanza In Abandoned Field

But work in the Barents can’t begin until Statoil can first build an infrastructure, such as pipelines and terminals for the oil. For example, the Norwegian government says the first field in the region scheduled to begin production, run by Italy’s oil and gas company ENI SpA, is now expected to face cost overruns when it begins work in 2015.

Nevertheless, Statoil isn’t worried, and in fact is bullish about its Johan Castberg oil field in the Barents Sea. Erik Strand Tellefsen, its vice president for field development in northern Norway, told Bloomberg News on Nov. 16, “We’ll be able to find a profitable standalone solution for Castberg, even with the current oil price.”

The key, according to Tellefsen, is building inexpensive floating infrastructure for production, storage and offloading. He said Statoil also may team up with Sweden-based Lundin Petroleum, which recently has discovered nearby oil fields, to keep costs low by building a new oil terminal at North Cape in extreme northern Norway. Statoil also is in talks with OMV, based in Vienna, about the project.

Related: Statoil: Too Early To Write Off Barents Sea For Energy

What’s more, Statoil’s field development director for Norway, Ivar Aasheim, says the company plans to mount several fast-track projects. He told Reuters in Stavanger, Norway, on Nov. 19, “We could easily have three, four, five fast-track projects in 2015, -16 and -17.”

One such project could even begin before the end of 2014, Aasheim said.

Fast-track projects target less-complicated energy discoveries with relatively small yields into quick development, halving the time it takes to begin actual harvesting of oil or gas. Costs are controlled by shunning new, cutting-edge and expensive equipment and techniques, instead settling for standard approaches and gear. Already, Statoil has approved 11 fast-track projects for the coming years.

But Aasheim cautioned that Statoil's plans could be crimped if the drop in oil prices continues much further. “Everything has a limit,” he said, “so if the oil price goes down to $60 [per barrel], then it will be very difficult to get an investment decision for these projects.”

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage




Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News