The cash flow from Petoro provides a substantial contribution to the Norwegian welfare state. "The significant number of projects being matured is important both to maintain activity for the suppliers, and to ensure that valuable resources are realised," says Kragseth. At the same time, she reminds us that the industry must step up and take responsibility to avoid the kind of cost spiral we've seen before. "Petoro has a substantial portfolio of almost 200 licences and a record number of projects, small and large. Our job is to help secure good solutions and quality when decisions are made."
Petoro manages an extensive portfolio with multiple large, mature fields. "We mustn’t forget that the most substantial values are all right here. Fields and pipelines can be used for a long time. We must take advantage of this by discovering and developing more resources in the surrounding areas. This requires a solid commitment from all parties," Kragseth points out.
Norwegian oil and gas – an important part of the transition
In May, the International Energy Agency (IEA) presented a report emphasising one possible path towards net-zero emissions in the energy sector. Despite the report's projected substantial reduction in demand for oil and gas leading up to 2050, it also shows that there will be a need for petroleum products in the years ahead. "The scenario from the IEA highlights one of several different options for achieving the objectives of the Paris Agreement. The oil and gas produced in the future will be the most cost-effective resources and the resources with the lowest possible emissions from production," Kragseth emphasises. "Norway should continue to develop solutions that will contribute to reduce our emissions, both from production and the use of this type of energy. Examples include hydrogen, ammonia, and CCS. Norway has the expertise, experience and funds to make this happen."
In June, the Government presented its White Paper "Putting Energy to Work", in which it continues to pursue the core aspects of Norwegian oil and gas policy. The White Paper shows that the resources on the Norwegian shelf can continue to contribute considerable values and jobs for the Norwegian society in the years to come. Among other things, the Government emphasises that electrifying platforms with power from shore is one of the primary avenues toward reducing emissions.
After remaining stable in the range of USD 60-70 per barrel, the price of oil has risen towards USD 75 per barrel by the end of the quarter - more than double the price in the second quarter of last year. "We're seeing the effect of society gradually reopening, alongside expansive fiscal policy in the shape of substantial public stimulus packages," Kragseth says. "Presuming that the reopening of society proceeds as planned, we're seeing signs of this growth continuing into the third quarter."
Petoro also has a significant gas portfolio, and European gas prices have also grown to record levels in the second quarter. A cold winter in Europe led to the depletion of gas stores, which must now be refilled. Strong demand growth in China has also resulted in increased competition for global LNG supplies, while also lifting prices in Europe, and the market expects prices to remain strong for the rest of 2021 and early 2022.
Results per second quarter
Three serious incidents were registered in the SDFI portfolio, compared with 12 during the same period last year. This yields a serious incident frequency of 0.61 for the last 12 months, which is a reduction from 0.9 at year-end.
Net cash flow from the State's Direct Financial Interest (SDFI) in the oil and gas activities totalled NOK 54 billion as of the 2nd
quarter, an increase of NOK 20 billion from the same period last year. This is due to a substantial increase in prices, increased demand, as well as good, safe operations.
Overall oil and gas production totalled 996 thousand barrels of oil equivalent per day (kboed), 17 kboed higher than the same period last year. This increase was mainly caused by higher gas output on Troll and Oseberg, partially offset by stop in production on Snøhvit after the fire on Melkøya and planned maintenance work on Åsgard.
Read the Board's quarterly report for additional details.
Head of Communications
Christian Buch Hansen
+47 926 24 255