"The enormous cash flow continues in the third quarter, but as we all know, this all comes with a dark and dramatic backdrop," Kragseth points out. "The situation for the energy industry has never been more unpredictable during Petoro's more than 20-year history, and the Ukraine war will most likely cast a shadow over geopolitics over the long term."
"Even in a challenging energy market, our shared assets are secured through the Norwegian model where the state holds ownership interests on the Norwegian shelf through Petoro. This allows us to ensure that the welfare state is the beneficiary of this extraordinary income," says Petoro CEO Kristin F. Kragseth.
A major drop in Russian energy deliveries to Europe is contributing to an acute shortage of energy and extreme prices. At the same time, energy production and consumption must be accomplished with the lowest possible environmental impact. This situation has made Norway’s position as a stable and secure supplier of gas and oil with low emissions even more important. "This is why it's important that the fundamental characteristics in Norwegian petroleum policy remain firm," Kragseth says, and also points out that the stimulus package adopted in 2020 has contributed to a record-number of plans for development and operations slated to be submitted leading up to the end of 2022. These projects will contribute to increased activity, particularly for the supplier industry, while simultaneously ensuring future production and value creation. Petoro's position is decisive in realising several of these projects.
Gas production accounts for an increasingly larger share of total production from the Norwegian shelf. Despite already high infrastructure utilisation, gas production increased by 9% in the third quarter as a result of increased production permits, using all available capacity and optimising production from all gas producers. Norway has never delivered more gas to Europe than it does today. Assessments are continuously under way as regards how the Norwegian shelf can further increase gas deliveries to Europe.
"We'll continue to optimise deliveries to secure long-term and predictable energy for Europe," Kragseth says, while also emphasising that Petoro is closely following the security measures around Norwegian installations. "Safe and secure operations every single day is at the core of everything we do," Kragseth emphasises.
Result as of the third quarter
Eleven serious incidents have been registered so far this year, compared with 13 during the corresponding period last year. This yields a serious incident frequency of 0.6 for the last 12 months, which is a reduction from 0.7 at year-end.
Net cash flow from the State's Direct Financial Interest (SDFI) in the oil and gas activities totalled NOK 402 billion as of the 3rd
quarter, an increase of NOK 304 billion from the same period last year. Net cash flow during the quarter came to NOK 167 billion. The increase was mainly caused by significantly higher prices for oil and gas, as well as increased sales of gas from Troll, Martin Linge and Snøhvit.
Overall oil and gas production as of the 3rd
quarter totalled 1,030 thousand barrels of oil equivalent per day (kboed), 28 kboed higher than the same period last year.
Gas production amounted to 107 million standard cubic metres (mill. scm) per day, up 9 per cent compared with the same period last year. The increase was mainly caused by increased gas extraction on Troll; production from Martin Linge, which started up last year; as well as Snøhvit, which resumed production at the end of the 2nd
quarter following the fire at Hammerfest LNG in 2022.
Liquids production totalled 357 kboed, a reduction of 28 kboed compared with the same period last year. The drop in liquids production was primarily caused by natural production decline on several mature fields, as well as planned turnarounds on Grane and Oseberg. Extraction of NGL products from the gas stream has also been reduced to optimise the value of gas in the strong gas market.
Head of Communications
Christian Buch Hansen
+47 926 24 255