The Norwegian Offshore Directorate (NOD) said in a resources report that the country’s oil and gas companies need to increase their investments in exploration and production.
This initiative aims to counteract the expected decline in the country’s production in the coming years.
Norway currently produces about four million barrels of oil equivalent per day, but many of its large offshore fields are already depleted and no new developments are planned for the 2030s, according to ^ “Reuters”.
The NOD expects the country’s oil and gas production to peak in 2025, in line with previous predictions.
NOD Director of Technology, Analysis and Coexistence Kjersti Dahle said: “We therefore need to increase exploration and investment in fields, discoveries and infrastructure in the future to slow the decline in production. Failure to invest will lead to a rapid collapse of the oil industry.”
The future of production depends on the industry’s ability to exploit new technologies around existing infrastructure and explore less developed areas such as the Barents Sea in the far north of Norway.
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By GlobalData
Oil and gas play a central role in the Norwegian economy, contributing more than 20 percent to the country’s gross domestic product and 44 percent to its exports.
The importance of this sector, especially for gas, has been underlined by Europe’s increasing dependence on Norwegian resources as a result of the Ukraine conflict.
However, due to uncertainties regarding the raw material base, exploration activity and technological progress, it is difficult to accurately predict future production levels.
To address this problem, NOD has developed three scenarios for oil production on the Norwegian Continental Shelf up to the year 2050.
The base case scenario assumes a decline from 243 million cubic metres of oil equivalent in 2025 to about 83 million cubic metres by 2050, assuming some short-term exploration activity.
In contrast, the low scenario assumes a rapid decline in production, possibly leading to a near-complete halt in production and untapped resource potential by 2050.
The high scenario offers a more optimistic outlook, with production levels maintained or increased until 2025, followed by a plateau and a gradual decline to produce around 120 million cubic metres of oil equivalent by 2050.
The potential impact on the Norwegian government’s net cash flow varies considerably, with the difference between high and low production scenarios being approximately NOK 15 trillion (US$1.4 trillion).
Earlier this year, Norway awarded 62 exploration licenses to 24 oil companies as part of its APA-23 round.
