Photo: Statoil – Roar Lindefjell / Bo Randulff
[09.05.2018] - Press release 1st quarter 2018

Strongest start of the year since 2014

As of the first quarter, net cash flow from Petoro totalled NOK 32.5 billion, an increase of 19 per cent from the same period last year. Petoro is now entering an exciting period of historically high project activity.
2018 will be a good year for the petroleum sector, and optimism has returned to Norwegian industry. The Confederation of Norwegian Enterprise's (NHO's) quarterly report shows that the supplier companies have the most positive outlook, and NHO has raised its projected investment growth from 1 to 7 per cent. "This is encouraging. Now we have to deal with the upturn at least as well as we dealt with the downturn," says Petoro's President and CEO Grethe Moen. "The Norwegian shelf is highly competitive and this gives us a historic opportunity. We have to work hard to implement additional efficiency measures, and thereby avoid the growth in costs the oil industry experiences in each upturn period. Here I believe that the ongoing digital development is the most important instrument to further increase competitiveness both in new projects and on fields in operation," says Moen.

New solutions
Oil companies and suppliers are currently spending considerable efforts on the technology side to develop new solutions. This is positive. Petoro believes that the greatest risks are linked to a lack of data and an imbalance between technology and work processes, as well as interfaces vis-à-vis suppliers. The contract formats must contribute toward continuous improvement efforts both with suppliers and operators. "We will remain involved in the licenses to contribute toward the success of the operators' ambitions through concrete measures. At the same time, new technology opportunities are constantly being developed, which means that digitisation of the industry is not a project, but rather a continuous process," Moen says.

Historically high project activity
Several of Petoro's projects are close to completion and are now headed offshore to prepare for production. This applies for both Martin Linge and the first phase of Johan Sverdrup. Johan Sverdrup is a good example of our ability to cut costs through efficiency and simplification. "We are looking forward to following the development on Johan Sverdrup, when Statoil will be sending employees offshore for the first time to connect and prepare the field centre for production late next year," says Grethe Moen.

Several exciting wells will be drilled this summer. New discoveries in the portfolio are essential, which means that more exploration wells are needed to ensure success moving forward. "There will be few major projects on the Norwegian shelf after 2022 if our future exploration isn't successful. We hope that 2018 will be a good year for discoveries," says Moen.

Improved HSE result
The positive development in HSE results in 2017 has continued in 2018. Nevertheless, we still have too many serious incidents. For the first time since 2011, a Storting White Paper was published in April concerning safety on the Norwegian shelf. This White Paper points out important areas where the parties must focus their efforts; learning from incidents, multipartite cooperation, digitisation and working environment. Petoro works actively as a partner in the licenses to follow up HSE results through our supervisory duty. This is also a key factor in increasing the competitiveness of the Norwegian shelf.

First quarter result
Net cash flow from the State's Direct Financial Interest (SDFI) in the oil and gas activities totalled NOK 32.5 billion as of the 1st quarter, an increase of 19 per cent from the same period last year. The increase is mainly due to higher prices for oil and gas.

Overall oil and gas production so far totalled 1 146 thousand barrels of oil equivalent per day, 47 000 barrels/day or 4 per cent lower than the same period last year. This reduction is due to lower oil production, which is mainly a consequence of natural production decline from existing wells on mature fields.

Publishing date: 09-05-2018