Norway sees oil and gas output rising 3.8 % in 2009

Oct 07, 2008 02:00 AM

Norway's total oil and gas output will grow by 3.8 % next year from 2008 and rise further by 2012 as more production of natural gas offsets less oil, the government said.
Oil production, including natural gas liquids, was seen at 139 mm cm of oil equivalent -- or at about 2.4 mm bpd -- next year, against 140 mm cm seen this year, according to the 2009 draft budget. Gas sales were seen growing to 106 bn cm in 2009 from 96 bn this year, the budget showed.

Overall oil and gas output was seen rising to 245 mm cm of oil equivalent next year from 236 mm in 2008. By 2012, total output would rise to 251 mm, the government said.
"The decrease in oil production is more than offset by the high oil prices and increasing gas production," Petroleum and Energy Minister Terje Riis-Johansen said. "Oil production is expected to be quite stable in the next few years, before a gradual decline is expected in the years thereafter," the ministry said. Rising gas sales were "expected to continue" in the years following 2009.

Non-OPEC Norway is the world's No. 4 oil exporter and Western Europe's biggest gas exporter. It said it has produced roughly one third of its expected recoverable oil and gas resources, including about half of the oil.
Revenues from oil and gas activities will account for 36 % of the government's income this year but net inflows from the sector are set to fall to NOK 407 bn (EUR 51.7 bn) in 2009 from a projected NOK 425 bn this year. The budget puts the average price of Norwegian crude oil at NOK 585 (EUR 74.2) per barrel this year and NOK 500 crowns a barrel in 2009, which was "a considerable adjustment upward" compared to the government's previous plan in May 2008.

"A reduction in economic growth worldwide combined with high oil prices have contributed to the slowing down of the demand growth for oil this year," the ministry said. "On the other hand, there is still little spare capacity and uncertainty regarding the supply of oil from several major producing countries," it said.
Oil and gas sector investments, including exploration costs, are expected to rise to NOK 137 bn in 2009 from NOK 127 bn this year and are expected to "remain at a high level in the next few years," the ministry said.

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