Oil and gas production from the SDFI portfolio is expected to remain at a level of just over a million boe/d in the years to come, with a fairly stable division between liquids and gas. Total output in 2020 is likely to be roughly unchanged from 2013, with the difference that the portfolio will contain a substantially larger number of fields and that production from large mature fields will be lower. Maintaining this stable level of output will be a challenge, and will call for an independent technical and commercial commitment by Petoro both to safeguard expected output from fields already covered by development decisions and to mature new projects.
Petoro manages large holdings in the big mature fields on the NCS. Its strategy calls for investment both to safeguard the production of existing reserves and to improve recovery from such fields. This will be an ever more demanding job, both because the simplest and cheapest volumes were produced first and because a high level of growth in costs combined with a stable oil and gas prices puts pressure on project profitability.
The big operators have communicated a need to set stronger priorities for projects in the light of capital requirements, cost increases and declining returns. This could lead to projects being postponed and to the priority of profitable Norwegian projects being downgraded to the benefit of developments in other countries. A danger accordingly exists that necessary and time-critical investments in mature fields fail to be implemented.
The board would emphasise the significance of the company’s strategy for the mature fields in the SDFI portfolio. Important jobs for maximising the value of the fields include increasing the number of production wells, ensuring that technical integrity provides scope for extending producing lives, and generally enhancing the efficiency of work processes.