Norway Slashes Gas Prospects

Europe may face a shortfall of Norwegian natural gas as soon as 2015 after the country slashed its estimate for undiscovered resources because of a dearth of discoveries from companies.

Europe’s second-largest supplier yesterday cut its estimate for gas yet to be discovered by 31 percent, or 570 billion cubic meters. That’s equal to more than five years of production at current rates and would be valued at about $186 billion based on today’s prices at the U.K’s trading hub.

“It is the estimates for the gas resources in the North Sea and the Norwegian Sea that have been written down,” Bente Nyland, head of the Norwegian Petroleum Directorate, said yesterday in an interview.

“This will rack up the pressure on the European Union to develop and secure access to reliable energy,” Thina Saltvedt, an analyst at Nordea Markets in Oslo, said by e-mail. “The EU will be forced to increase imports from the Middle East and Africa to compensate for and reduce Russia’s domination.”

Royal Dutch Shell Plc., Statoil ASA and other companies have been finding smaller and smaller amounts or striking out in drilling off Norway, casting in doubt Norway’s status as reliable supplier of the fuel and its goal of transforming itself into a gas nation as oil production slumps.

Source: Norwegian Petroleum Directorate via Bloomberg (Read the Full Article HERE)