59 billion to the Norwegian Oil Fund from Petoro first half 2019

[08.08.2019] - Press release - Second quarter 2019
Handing over PDO for Johan Sverdrup phase one February 2015.  Photo: Audun Braastad / NTB scanpix
Handing over PDO for Johan Sverdrup phase one February 2015. Photo: Audun Braastad / NTB scanpix
The Norwegian continental shelf remains strong. Stable production contributed to Petoro’s transfer of 59 billion kroner to the Norwegian Government Pension Fund Global (the Norwegian Oil Fund) in the first six months of 2019, three billion more than in the first half of 2018. Petoro’s revenues account for a vital share of the State’s income from the oil and gas industry. “It is very gratifying to note that revenues from the State’s portfolio remain high,” says Grethe Moen, President and CEO of Petoro. “This illustrates that our producing fields are profitable even in a market with fluctuating oil and gas prices.”
Since the 1970s, petroleum activities have contributed income of more than 14 000 billion kroner to Norwegian society, measured in current value. The revised national budget for 2019 estimates the total revenues at around 21 per cent of the State’s total revenues. Norway now has more than 9 300 billion kroner saved up in the Government Pension Fund Global. Revenues from the oil and gas industry provide long-term assurance for the welfare of future generations.
 
Increasing importance of gas
Oil production from Norway accounts for about two per cent of global production. We were the world’s third largest gas exporter in 2018, following Russia and Qatar, and gas accounts for a steadily growing share of Petoro’s portfolio.

Global greenhouse gas emissions must be reduced, and we must eliminate nearly all use of coal in order to achieve our climate goals. “Norway’s truly significant contribution toward reducing global carbon emissions lies precisely in the role we can play as an exporter of gas. If we want to rapidly cut global CO2 emissions at a realistic price, Norwegian gas will be a decisive contribution. With our efficient gas infrastructure, Norway is uniquely qualified to ensure stable gas deliveries to Europe for several decades to come,” says Grethe Moen.

Several large fields will soon be ready for commissioning, the first of which is Johan Sverdrup. The first phase of development is nearing 90 per cent completion. “According to plan, we could start production in November of this year,” says Moen. The Norwegian authorities formally approved the second construction stage of Johan Sverdrup on 15 May. Overall, this field will be the largest development on the Norwegian shelf since the 1980s. “At peak production, Sverdrup will account for 25 per cent of total oil production from the Norwegian shelf, and it will thus provide significant revenues for society for many years ahead. The field is electrified, which means minimal emissions, and it also has a breakeven price of less than 20 dollars/bbl. Equinor also recently reported that the investment estimate for phase 1 has been reduced by another NOK 3 billion, which contributes to making total costs NOK 40 billion lower since the development plan was submitted. Johan Sverdrup therefore emerges as globally competitive, both in terms of economic profitability and climate-friendly production.
 
The Johan Sverdrup licence has also made a commitment to fully exploiting all digital opportunities. This entails utilising record volumes of data through all phases of the field’s lifetime, also including data from other fields over time. “We are very pleased that the Sverdrup licence has taken a leading role in the work for more and better data sharing, as was called for in KonKraft’s report "Competitiveness – changing tide on the Norwegian continental shelf” from February 2018,” says Moen. Parts of this work are in the final phase, and we look forward to the results being utilised across the entire Norwegian shelf. This will increase profitability in existing and new fields, and thus also our competitiveness.
 
SDFI results in the first half of 2019
There have been fewer serious incidents in the second quarter than in the first quarter. This yields a serious incident frequency of 0.6 in the SDFI portfolio. Petoro prioritises learning from all incidents together with operators and partners in the licence work. Moen emphasises that improvement requires commitment from every individual throughout all parts of the activity.

The net cash flow from the State’s Direct Financial Interest (SDFI) in oil and gas activities was 59 billion kroner in the first half of 2019, an increase of three billion from the same period last year.
 
Overall oil and gas production totalled 1 022 thousand barrels of oil equivalent per day, five per cent lower than the corresponding period last year. The reduction is mainly due to natural production decline and lower gas production from Troll.


Press contact:
Head of Communications 
Christian Buch Hansen
926 24 255
 

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