The Norwegian energy company Equinor, Norway’s main oil company, has decided to extend key agreements with suppliers worth approximately 17 billion Norwegian kroner, with the aim of strengthening drilling and well maintenance on the Norwegian continental shelf. This decision seeks to ensure stable production levels and guarantee energy supply to Europe in an environment marked by market volatility.
How will this money be spent?
The funds are allocated across two types of agreements with technology and service providers:
- Integrated drilling and well maintenance contracts, valued at 8.3 billion kroner. The awarded companies are Baker Hughes, Halliburton, and SLB.
- Framework agreements for specialized services, valued at approximately 4.3 billion kroner per year for two years. Here, in addition to the three aforementioned companies, 15 other suppliers participate with highly specific technologies, such as submersible pumps, fiber optics, insulation systems, etc.
What is the significance of this announcement?
There are several reasons:
- Norway is an important energy supplier, especially in a context of unstable energy markets. Maintaining Norwegian production helps ensure a stable supply.
- Equinor aims to maintain its production at 1.2 million barrels per day until 2035. New wells will account for 70% of that production by 2035.
- These contracts will provide employment for approximately 2,500 people on fixed and mobile platforms.
- The fields are aging, and extracting oil is now more complex, requiring more technical interventions.
The Technical Challenge
On older or “mature” platforms, existing wells produce less and less, so to maintain production levels, new wells must be drilled and more interventions carried out. The goal is to do this faster, cheaper, and with more technology (standardization, automation, etc.), without compromising safety.
This announcement reveals how the oil company seeks to continue extracting oil and gas in the Norwegian Sea, to secure employment and contribute to Europe’s energy security.
Source: Equinor