Page 11 - EurOil Week 04 2021

EurOil PERFORMANCE EurOil

Norwegian liquids supply

surges in December

NORWAY NORWEGIAN liquids production surged 13.7% Operator Equinor has warned that it does not
month on month and 11.7% year on year in anticipate the complex resuming operations
Norway expects frontier December, on the back of further growth at the until late 2021.
licence awards in the Equinor-led Johan Sverdrup project.
second quarter. Supply averaged 2.135mn barrels per day News from the frontier
(bpd), surpassing the forecast by 2.5%, the Norwegian authorities have just announced
Norwegian Petroleum Directorate (NPD) awards from the latest APA licensing round,
reported on January 22. Crude oil-only extrac- which offers rights to acreage in well-explored
tion amounted to 1.81mn bpd, marking a 12.1% areas near to existing infrastructure. Some 30
increase m/m but only up 3.2% y/y. companies were picked to explore at 61 licence
Sverdrup, situated in the Norwegian North areas.
Sea, was brought on stream in autumn 2019 and All eyes are now on the progression of Nor-
was originally expected to flow 440,000 barrels way’s latest frontier licensing contest, launched
per day (bpd) of crude under its first phase. But in November offering 136 blocks mostly in the
Equinor announced in March 2020 that produc- under-explored Barents Sea.
tion would be increased to 470,000 bpd following The deadline for applications is February
better-than-expected well performance. The bar 23, and Norwegian Oil Minister Tina Bru told
was raised again to 500,000 bpd last November. Parliament on January 21 that awards would be
Norwegian oil production will be more flex- unveiled in the second quarter. But this is assum-
ible this year, following the easing at the end of ing that the round does not fall foul of growing
December of self-imposed output cuts by the antipathy towards oil and gas drilling that is
government. sweeping Europe.
The country’s gas extraction averaged Fellow North Sea producer Denmark
323.3mn cubic metres per day last month, mark- abandoned a latest offshore licensing round
ing a 4.2% decline y/y, according to the NPD. in December, after the government faced crit-
Supply dipped 1.2% below the forecasted level icism that continued oil and gas exploration
but increased by 14.8% m/m. was incompatible with the country’s climate
Gas demand has spiked in Europe following goals.
several weeks of unusually cold weather. In con- Environmentalists had sought to challenge
trast to the glut in LNG supply that was prevalent the award of licences in the Barents Sea at Nor-
last year, a lot of the super-chilled gas has been way’s supreme court, citing Norway’s founding
diverted to cover soaring levels of consumption principles. In December, though, the court ruled
in Asia, where markets offer a premium. that the government had acted lawfully in issuing
Russia’s Gazprom has benefited greatly the licences.
from these conditions, reporting a 41.5% y/y This is likely not the end of the story, however.
growth in gas shipments to Europe and Turkey While it has succeeded in court, government
in the first half of January. But despite the sud- policy continues to draw criticism from opposi-
den increase in demand, the European market tion parties and campaigners.
remains very well stocked. Its underground gas “It takes many years from the time awards
storage facilities were still 73% full at the end of are made until discoveries are made and out-
last year, according to data from Gas Infrastruc- put starts,” Lars Haltbrekken, a member of
ture Europe. parliament for the opposition Socialist Party,
Another factor weighing down on Norwe- commented. “The output envisioned by the gov-
gian gas supply has been the closure of the Ham- ernment from these permits will be in conflict
merfest LNG plant following a “dramatic” fire with the goals set in the Paris climate agreement
that tore through the facility in late September. of limiting the rise in global warming.” ™

Week 04 28•January•2021 www. NEWSBASE .com P11