Offshore staff
LONDON — Wood Mackenzie’s latest "North Sea upstream: 5 things to look out for" report predicts that Norway’s offshore oil and gas production will increase from 4.1 MMboe/d to 4.3 MMboe/d this year.
The rampup of the recently onstream Phase 2 of the Johan Sverdrup Field in the North Sea to more than 700,000 bbl/d will be a major factor, offsetting losses elsewhere in the sector.
And the industry in Norway should deliver more than US$200 billion in upstream profits, most of which will go to the government, according to the report’s author Neivan Boroujerdi, who is director of research with Wood Mackenzie's Upstream Oil and Gas division.
“Additional fiscal changes are a wildcard. A high price contribution on wind and hydropower was proposed last year and will take the marginal tax rate above that for oil and gas, which may not be palatable in all sections of the country,” Boroujerdi said.
Following a large number of final investment decisions (FIDs) on new field development projects late last year, investment on the Norwegian Continental Shelf should steady out to 2030. But the high number of projects, driven by temporary tax incentives, has put pressure on the supply chain and could mean increased lead-times and budgets, particularly for projects sanctioned toward the end of the window, Boroujerdi added.
“Costs for 2022 FIDs are up over 50%. We expect no FIDs in Norway in 2023, as the focus shifts to delivery. There are currently a whopping 40 projects under development, which will test both operator and supply chain capacity," Boroujerdi said.
Wood Mackenzie foresees about 30 exploration wells offshore Norway this year, with Equinor and Aker BP accounting for nearly 50%.
The overall target is close to 1.5 Bboe, with the biggest wells pursuing gas. The largest identified prospect is OMV’s 130-MMboe Velocette in the Norwegian Sea, while appraisal could deliver a further 250 Mboe.
01.20.2023
