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The giant Johan Sverdrup oilfield in Norway’s North Sea is expected to increase its oil production this quarter after the Norwegian government raised the Q4 production permits for Western Europe’s biggest producing field, a minority partner in the project, Lundin Energy, said on Friday.
In its Q3 results release, Lundin, which holds 20 percent in the oilfield operated by Equinor, said that permitted production under the government-mandated production cuts were raised for the Johan Sverdrup, Edvard Grieg, and Alvheim fields, after some fields pumped less oil than allowed in Q3 due to technical issues and maintenance problems.
Norway is currently reducing its oil production by the end of the year because of the slump in oil prices in March and April. In a bid to support global efforts to prop up oil prices and ease the glut, Norway laid out a plan to cut its crude oil production by 250,000 bpd in June, and then maintain a 134,000-bpd lower rate of production for the rest of 2020. This is the first time Norway has joined oil production cuts since 2002, when the country reduced its production rate by 150,000 bpd over the first half of the year after oil fell below $20 a barrel following 9/11.
Referring to Johan Sverdrup’s production in the fourth quarter this year, Alex Schneiter, chief executive officer of Lundin Energy, said on the earnings call, as carried by Reuters:
“During November, we will be further testing capacity at Johan Sverdrup, and we expect that we will be able to show that we can produce above 470,000 boed.”
The Norwegian authorities haven’t signaled that they plan on extending the production cuts into 2021. However, the second coronavirus wave is now threatening to derail oil demand recovery, the executive said.
“I haven’t had any signals on that front whatsoever,” Schneiter said on the call.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com