1.3 billion per day straight to the Norwegian state

[03.08.2022] - Press release - Second quarter 2022
Photo: Harald Pettersen / Equinor
Photo: Harald Pettersen / Equinor
Petoro has delivered a cash flow of NOK 234 billion as of the second quarter of 2022, 48 billion more than the result for the entire record-breaking year of 2021. Cash flow for the second quarter in isolation amounted to NOK 121 billion. This means that the SDFI portfolio, which Petoro manages, contributed 1.3 billion to the Norwegian welfare state every single day during the first half of 2022.
"We're delivering a very substantial cash flow. Never before has the Norwegian state received such vast revenues from the petroleum activities," says Petoro CEO Kristin F. Kragseth.
"This record-breaking result can primarily be attributed to the extremely high energy prices currently posing a challenge for the entire world. Good operations and long-term efforts have ensured that we can contribute to secure and reliable energy deliveries with low emissions, to a European market under severe pressure," Kragseth emphasises. "In light of this, we're also very pleased that the Snøhvit field is once again delivering gas, after the fire on Melkøya and resulting shutdown in 2020."
 
On 8 April, the Johan Castberg ship arrived at Stord, where it will be commissioned at the Aker Solutions shipyard on Stord. "This was an important milestone for the project," Kragseth says. "More discoveries were also made recently, Snøfonn and Skavl, and they are being assessed for tie-back to Castberg."
 
Petoro is embarking on a very busy autumn as a result of the stimulus package the Storting (Norwegian parliament) introduced during the pandemic. A record number of projects on the Norwegian shelf are currently being considered and matured toward an investment decision. "Along with its partnerships, Petoro plays an important role in ensuring good quality in the decision-making basis for these projects," Kragseth says, and emphasises that we must leave no stone unturned in our quest to avoid cost overruns and delays.
 
There are enormous future values in the SDFI portfolio, and sound management and control are prerequisites for preserving and realising these values. Rystad Energy recently undertook a valuation of the SDFI portfolio on assignment from the Ministry of Trade, Industry and Fisheries. "Since the last valuation in 2020, the assets in the SDFI portfolio have increased by NOK 540 billion, and the portfolio has reached a value of NOK 1584 billion," Kragseth says. "At the same time, it's important to remember that, in 2020 and 2021, Petoro delivered an overall cash flow of NOK 245 billion from the portfolio. Large parts of the increase in value are caused by higher prices, but a significant share is also the result of efforts to increase the resource base. In comparison, the recently published state ownership report reveals that the total market value of all the state's ownership interests in companies (without the SDFI), came to NOK 1174 billion."
 
Earlier this year, Petoro published its first sustainability report, setting an ambitious goal to cut 55% of our production emissions by 2030. "In order to achieve this goal, our industry will need to keep up the pace of initiating emission-reducing measures," Kragseth says.
 
The partners in the Troll and Oseberg-fields recently launched plans for a study to explore the possibilities for developing a large floating offshore wind farm west of Bergen. "The Trollvind initiative will look at possibilities for solving three key challenges; a strained power situation in the Bergen area, electrification of the fields and scaling up the offshore wind industry," Kragseth says. "Offshore wind development in Norway is based on our industry's extensive offshore experience, specifically on experience gained from the Hywind Tampen project." "Time and time again, our industry demonstrates that we can develop new solutions based on the extensive knowledge we already have, and the experience we have acquired throughout history as a maritime nation," Kragseth says.
 
Result as of the 2nd quarter
Ten serious incidents have been registered so far this year, compared with six during the corresponding period last year. This yields a serious incident frequency of 0.8 for the last 12 months, which is an increase from 0.7 at year-end.
 
Net cash flow from the State's Direct Financial Interest (SDFI) in the oil and gas activities totalled NOK 234 billion as of the 2nd quarter, an increase of NOK 180 billion from the same period last year. Net cash flow during the quarter came to NOK 121 billion. This is due to a substantial increase in prices, higher demand, as well as good, safe operations.
 
Overall oil and gas production totalled 1048 thousand barrels of oil equivalent per day (kboed), 52 kboed higher than the same period last year.
 
Gas production amounted to 109 million standard cubic metres (mill. scm) per day, up 11 per cent compared with the same period last year. The increase was mainly a result of increased gas extraction on Troll and Åsgard; production from Martin Linge, which came on stream last year; as well as Snøhvit, which resumed production on 2 June following the fire at Hammerfest LNG in 2020. Lower gas extraction on Oseberg and Ormen Lange partly offset the increase.
 
Liquids production totalled 364 kboed, a reduction of 13 kboed compared with the same period last year. The reduction in liquids production was primarily caused by natural production decline on several mature fields, as well as the turnaround on Grane during the 2nd quarter. Production from Martin Linge, as well as improved recovery from Vigdis, have partly offset this reduction.
 
Read the Board's quarterly report for additional details.
 
 
Press contact
Head of Communications
Christian Buch Hansen
+47 926 24 255
 

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