"Our results are the fruit of many years of hard work, but also the difficult position Europe is in due to the war in Ukraine," says Petoro CEO Kristin Kragseth. "As I've said before, this is not a good situation for a world that relies on energy. Now we're in the midst of an energy crisis, but it's still important that we don’t lose sight of the big picture and the road ahead. This is why I'm proud and happy to see that, for the first time, Petoro is publishing its own sustainability report, where one of the goals we've set is to cut CO2
emissions from our share of production by 55% by 2030."
Russia's invasion of Ukraine poses a challenge for Europe's gas supply, it has contributed to extreme prices, and it has particularly raised awareness surrounding Norwegian gas exports. "The war has put security policy and security of supply squarely on the agenda. It matters where the energy is produced, and we're now clearly seeing Norway's significance as a safe and reliable supplier of energy for Europe," Kragseth says.
Gas exports from Norway have been stable and high throughout the first quarter. In mid-March, the Ministry of Petroleum and Energy increased the production permits for gas from the Oseberg, Troll and Heidrun fields. "The increased production permits will mean that the overall gas export capacity can be fully utilised through the summer as well, when exports are normally lower. Export capacity will also be bolstered when liquid gas (LNG) from the Snøhvit field can again be shipped to the markets via Melkøya, which will be starting up again on 17 May, following the fire in September 2020."
Petoro's mission to realise resources and create value from the portfolio is no less meaningful in the current context. "We work every day to help ensure that our record-breaking portfolio of ongoing projects lead to the best possible results. At the same time, we do what we can to extract more from the fields that are already in production. This secures the future energy supply for Europe and value creation for the Norwegian economy," Kragseth says.
Cutting emissions from the SDFI portfolio by 55%
Today, Petoro is publishing its first sustainability report. "As one of the largest players on the Norwegian shelf, we have a responsibility to highlight the significance of Petoro and the SDFI portfolio in a sustainability perspective," Kragseth says. "This is also underscored by the energy trilemma we're currently facing; energy security, adapting to a sustainable future and energy that is accessible for everyone at an acceptable price."
In light of both the reports from the Intergovernmental Panel on Climate Change, and the EU's clear objective of a zero emission society, it is more important than ever to set clear and ambitious targets. Petoro will therefore work to reduce greenhouse gas emissions from the SDFI portfolio by 55% by 2030, compared with 2005. By 2050, the emissions must be near zero.
A number of steps must be implemented to achieve these targets. "Various electrification projects will contribute to most of the emission reductions," Kragseth says. "We'll be making considerable investments in emission-reducing measures moving forward, which given the increased cost associated with CO2
emissions, will be profitable and important investments to reinforce the competitiveness of the SDFI portfolio. Hywind Tampen, which will partially electrify the Snorre and Gullfaks fields, is the first offshore wind project in the SDFI portfolio. Developing offshore wind in Norway is a major industrial opportunity for us as an energy nation. A further development of offshore wind on the Norwegian shelf will be sustainable value creation in practice," Kragseth says.
Result as of the 1st quarter
There were a total of five serious incidents in the SDFI portfolio in the first quarter, which yields a serious incident frequency of 0.70 for the last 12 months. This is a decline from 0.72 at the end of 2021. The personal injury frequency came to 3.79, compared with 3.78 at the end of the year.
Net cash flow to the State from the SDFI as of the 1st quarter of 2022 totalled NOK 113 billion.
The increase was mainly caused by significantly higher income as a result of increased oil and gas prices.
Total production amounted to 1078 thousand barrels of oil equivalent per day (kboed), an increase of 32 kboed compared with the same period last year.
Gas production amounted to 112 million standard cubic metres (mill. scm) per day, an increase of eight per cent compared with the first quarter of last year. The increase was primarily caused by increased gas extraction on Gullfaks and Troll, as well as production from Martin Linge, which came on stream in the summer of 2021. The average realised gas price was NOK 10.22 per scm, compared with NOK 2.16 in the same period last year.
Liquids production totalled 377 kboed, a reduction of 17 kboed compared with the first quarter of 2022. The reduction was primarily caused by natural production decline on several mature fields, and was partly offset by production from Martin Linge, as well as improved recovery from the Vigdis field. The average realised oil price was USD 104, compared with USD 61 per barrel in the same period last year. The price increase in Norwegian kroner was bolstered by a weakened NOK exchange rate, and the achieved oil price was NOK 925, compared with NOK 518 per barrel in the same period last year.