Statoil ASA (STL)’s share of Norwegian oil and gas licenses will be monitored by the new Conservative-led government after the party vowed to expand industry competition.
“There has been reason to keep a vigilant eye” on the state-controlled company’s dominance of the Norwegian shelf since it merged with Norsk Hydro ASA (NHY)’s petroleum business in 2007, Tord Lien, the country’s energy minister, said in an interview in Oslo. “We’ll keep doing that.”
The Stavanger-based company, 67 percent owned by the state, runs more than 70 percent of Norway’s oil and gas output as an operator and had a 34 percent share of total production in the second quarter, according to figures from the company and the Norwegian Petroleum Directorate.
The new government, a coalition between Prime Minister Erna Solberg’s Conservative Party and Lien’s Progress Party that took power last week, plans to raise competition as it maintains past administrations’ pace in awarding offshore licenses.
While Conservatives said before the election that Statoil’s competitors may be favored in license rounds, Lien declined to elaborate on how the new government would increase competition. The current licensing system has already led to more diversity, he said, calling that a “fortunate development.”
The new government has also said it would study tax changes to provide incentives to expand recovery rates at producing and marginal fields, although it won’t reverse a May tax increase that was criticized by companies such as Statoil. “This is definitely something we need to spend a lot of time looking at,” Lien said, declining to comment on potential measures.
Norway’s crude production, Western Europe’s biggest, is expected to fall for a 13th year to half the peak reached in 2000 because of dwindling reserves in aging North Sea fields.
Investments are still expected to reach a record 211 billion kroner ($36 billion) this year, according to the statistics bureau, as finds such as Johan Sverdrup in the North Sea and Johan Castberg in the Barents Sea renew interest.
To contact the reporter on this story: Mikael Holter in Oslo at email@example.com