Page 19 - EurOil Week 29

EurOil PERFORMANCE EurOil

Norwegian production lags behind

expectations in June

NORWAY NORWEGIAN oil production dropped more demand triggered by coronavirus (COVID-19)
than expected in June, while gas extraction grew lockdowns. It closed at €5.1 ($5.8) per MWh on
Oil production fell by less than forecast, the Norwegian Petroleum July 17.
further than expected, Directorate (NPD) reported on July 17. Oil prices are also low but are recover-
even when mandated Oil output averaged 1.54mn barrels per day ing, thanks to production cuts and rising fuel
cuts were taken into (bpd) during the month, 4.1% below forecast and demand. Brent closed at above $43 per barrel on
account. down 12% compared with the level in May. Nor- July 17, while West Texas Intermediate (WTI)
way enforced cuts last month, to assist OPEC+ in ended at $40.6 per barrel.
rebalancing global supply with demand. Norway has provided its offshore industry
The production cap has been set at 1.61mn with NOK100bn ($10.6bn) in tax relief to ensure
bpd, and is spread across various oilfields on the investments in new production continue. Its tax
Norwegian Continental Shelf (NCS). code was already highly supportive of explora-
“The fields that produced less than the quota tion, enabling companies to recoup 80% of their
set for June can add these volumes to their pro- costs.
duction quota in the second half of the year,” A number of producers have announced new
Norway’s Petroleum Ministry said separately. or revived projects, citing the tax relief as the
Year on year, production was 46% higher, reason. Most recently, Eni subsidiary Var Energi
thanks to the giant Johan Sverdrup oilfield, said on July 16 it was resuming its drilling cam-
which came on stream last autumn and is now paign off Norway. The campaign involves one
flowing 470,000 bpd of oil. production and one water injection well at the
Overall liquids amounted to 1.86mn bpd in Goliat oilfield in the Barents Sea and one explo-
June, 4.2% below forecast, down 8.8% month on ration well near the Balder/Ringhorne project in
month but up 32.8% year on year. the North Sea.
Gas production climbed 5.9% m/m to 280mn “After a period of difficult choices and deci-
cubic metres, although this was 10.6% below the sions, we are pleased to announce that we are
forecast and 10.1% below its level a year earlier. resuming parts of the drilling schedule that
Norwegian producers have been keeping some was postponed earlier this year due to the
gas supply back, amid record low gas prices on extraordinary situation the entire industry
the European continent. Dutch producers have was in,” Var Energi’s vice-president for pro-
been doing the same. curement, Annethe Gjerde said. “The politi-
The August contract at the Netherlands’ TTF cians’ ability and willingness to find solutions,
trading platform, Europe’s biggest gas hub, has through temporary changes in the tax regime,
shed well over half of its value since the start have made it possible to reconsider such dif-
of the year, largely as a result of the collapse in ficult choices.” ™

Week 29 23•July•2020 www. NEWSBASE .com P19