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Press release, 3rd quarter of 2015

Ambitious goals – a precondition

Stavanger, 3 November 2015: Changes to the operations of fields in the State’s Direct Financial Interest (SDFI) portfolio are moving in the right direction, reports Grethe Moen, CEO of Petoro. “A doubling in the pace of drilling on certain installations shows that it is possible to meet ambitions for efficiency improvements which halve costs. Given what we’ve seen, we still believe a great potential for improvement exists. Further progress in this direction requires a more radical approach.”
Effective work processes, simplified well design, better planning and more efficient utilisation of drilling facilities help to explain the improvements. These have made it possible to drill more wells this year and offer opportunities to do so again in 2016. The measures which work in drilling are relevant for other disciplines as well, and good work is also being done in other areas.
 
To make further progress, work must be done on utilising new technological opportunities, on contracts and on continued development of an open and trusting collaboration between operator and suppliers at all levels.
 
“We in Petoro are now seeing the results of short-term measures which have had an immediate effect,” observes Moen. “Fundamental changes in the way the industry collaborates will call for a lengthy commitment. It’s positive that Statoil, as the leading operator, is now saying clearly that costs must be reduced to the level which prevailed in the industry during the early 2000s. That’ll boost the profitability of new projects and yield increased activity on the Norwegian continental shelf (NCS).”
 
The Gullfaks wet gas compression and Åsgard subsea compression projects have become operational in recent months. Extensive development work and the use of new technology have provided efficient solutions and improved profitability in both cases.
 
“This wouldn’t have been possible without close collaboration between operator, partners and suppliers, and demonstrates the potential offered by effective collaboration over common goals,” says Moen. “We’ve been an active driver in the development of these technologies, and also want these solutions to be exploited on other fields.”
  
Net cash flow from the SDFI in oil and gas operations on the NCS came to NOK 17 billion in the third quarter, down by NOK 2 billion from the same period of 2014. High production and sales of gas, higher gas prices and the USD/NOK exchange rate reduced the effect of lower oil prices. Investment for the first nine months was NOK 6 billion lower than in the same period of last year.
       
Field costs for Petoro’s portfolio declined in the first nine months compared with the same period of 2014. Other indicators are also moving in a positive direction.


Read more about Petoro’s results in the directors’ report for the second quarter of 2015 here.

 
Publishing date: 03-11-2015