The Norwegian Offshore Directorate has presented a detailed report projecting three possible scenarios for oil and gas exploration and production under the Norwegian Continental Shelf(NCS) statutes until 2050.
Norway’s oil and gas production plans
This report highlights the importance of the oil industry to the country’s economy, noting that the difference between high and low production could be equivalent to an entire government pension fund, with a net cash flow difference of up to NOK 15 trillion (approximately $1.4 trillion) between the possible scenarios.
Norway is a country rich in hydrocarbon resources, and has great potential to maintain high production and export levels in the coming decades. However, this promising future will not materialize without intensified exploration and investment in new fields and key infrastructure. According to Kjersti Dahle, director of technology, analysis and coexistence at the Norwegian Offshore Directorate, production in the NCS will start to decline after 2025 if investments are not made. “If there is no investment, it will quickly dismantle the oil industry,” Dahle warned.
The report presents three different scenarios for oil and gas production to 2050, all of which indicate an inevitable decline in production. The speed of this decline will depend on several factors, including the level of exploration activity and technological advances. These scenarios are aligned with the goals of the Paris Agreement, which seeks to reduce global greenhouse gas emissions.
Despite this prognosis, the Norwegian Offshore Directorate emphasizes that exploration remains extremely profitable. An analysis of the past two decades shows that exploration in the NCS has generated a net present value of more than NOK 2 trillion, with total value creation exceeding the cost invested in exploration by three times.
“Norway and the NCS are uniquely positioned to remain a competitive oil and gas producer for many years to come, thanks to our substantial resources, low emissions, well-developed infrastructure, low operating costs and stable framework conditions.”
Kjersti Dahle, director of technology, analysis and coexistence at the Norwegian Offshore Directorate.
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Source: Norwegian Offshore Directorate
Photo: Shutterstock
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