Page 13 - EurOil Week 39 2021

EurOil PERFORMANCE EurOil

Norwegian gas supply misses

forecast in August

NORWAY NORWEGIAN gas production lagged behind offshore industry is likely to receive less favoura-
the forecast figure in August for the third month ble treatment from the new government.
The output of Europe’s running, the Norwegian Petroleum Directorate Norway’s Labour, Socialist and Centre parties
second biggest gas (NPD) said on September 23, at a time when won a majority of seats in Norway’s parliament
supplier is expected to Europe is in the grip of a gas supply crisis. in an election on September 13, beating the Con-
dip further this month. Gas supply averaged 301.3mn cubic metres servative-led government. The three winning
per day during the month, which was 3.6% parties are now in talks to form a majority coali-
below the level forecast, and down 2.6% from tion government.
the level in July. It still marked a 5.1% increase Climate was a major talking point during the
year on year, however. election. While Conservatives are seen as the
The output of Europe’s second-biggest gas strongest supporters of the oil sector, they never-
supplier after Russia is expected to dip fur- theless announced a snap tax hike for the sector
ther this month before recovering in October, on August 31, two weeks ahead of the elections,
according to the NPD’s forecasts. But these fore- in move aimed at bringing on side voters less
casts do not account properly for the sharp rise inclined to give offshore producers tax breaks
in prices in recent months and weeks. Equinor and concerned about their climate impact.
has already responded to the market conditions From 2022, a special tax rate paid by produc-
by securing approval to boost gas flow from ers will be raised from 51% currently to 71.8%,
the Troll and Oseberg fields by 2 bcm per year, although the overall tax rate of 78% will remain
beginning in October. unchanged, the finance ministry said. The gov-
Gas supply contrasted oil and other liquids ernment also plans to bring an end to a reim-
production, which beat the forecast in August by bursement system for exploration costs, which
2.8%, averaging 2.114mn barrels per day (bpd). helped prop up drilling rates during the down-
This was also 3.9% higher month on month and turn last year. The ministry said it expected the
4.3% higher y/y. This trend was even more pro- changes to bring in an extra NOK7bn ($180mn)
nounced with oil-only supply, which came in at in budget revenues from investments made in
3% above the forecast at 1.812mn bpd, and 3.4% 2022.
higher m/m and 4.7% higher y/y. The incoming government, which should
take power next month, could take an even
New leadership tougher stance, depending on its formation. The
Norway, Russia and Europe’s other major gas Socialist Party has called for all exploration to
suppliers are set to reap significant rewards from end immediately, although the Labour and Cen-
current high prices. But despite the expected tre parties oppose this, as they are keen to protect
hike in profits this year, Norway’s lucrative the economy and jobs. ™

Week 39 30•September•2021 www. NEWSBASE .com P13