Jan. 13 (Bloomberg) -- Norwegian oil production will fall 6 percent this year, its 11th annual decline, as the world’s seventh-largest crude exporter struggles to maintain output after 40 years of pumping from aging North Sea fields.
Production will fall to 98.3 million cubic meters in 2011, or 1.7 million barrels a day, from 104.4 million cubic meters in 2010, the Stavanger-based Norwegian Petroleum Directorate said today. Gas output is expected to rise to 109.1 billion cubic meters from 106.4 billion cubic meters, the agency said.
“The fact that the companies on the Norwegian shelf are not able to achieve a maximum exploitation of our fields poses a challenge,” said Bente Nyland, head of the agency, at a presentation in Stavanger. “Although our recovery rate is among the best in the world, we are still not satisfied. If we manage to recover just 1 percent more, this would mean revenue in the hundreds of billions for Norway.”
Aging North Sea deposits and smaller discoveries off the Scandinavian peninsula have cut crude output almost in half over the past decade. The world’s second-biggest gas exporter is raising output of that fuel and opening more unexplored northern waters to keep up production. Companies such as Statoil ASA are calling for more areas to be opened, including an environmentally sensitive area off Lofoten that may hold 1.3 billion to 3.5 billion barrels in oil and gas.
The agency reduced the estimated undiscovered reserves in Norway to 2.6 billion cubic meters in oil equivalent from 3.3 billion cubic meters in part because of “disappointing drilling results,” according to the statement.
Total petroleum production for 2010 reached 229.5 million cubic meters, falling short of a January 2010 estimate of 236 million cubic meters after halts at fields including Statoil’s Gullfaks, Tordis, Vale and Heidrun. Statoil, which operates 80 percent of the country’s production, in November cut its output guidance for 2010 to 1.9 million barrels a day.
Norway’s oil production is expected to drop to 88.9 million cubic meters in 2015, while gas output will climb to 112.2 billion cubic meters in the same period, the directorate said. Total output will decline to 221 million cubic meters by 2015, the agency forecast.
Norway’s oil and natural gas investments may reach a record 150.8 billion kroner ($25 billion) next year, from 133 billion kroner this year, as companies increase spending on platforms to keep aging fields alive, Norway’s Statistic Agency said last month. Statoil expects to raise its investments about 14 percent to about 40 billion kroner, it said in December.
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