Production in Norwegian Continental Shelf Increases

The output from the Norwegian continental shelf (NCS) has begun to rise in the past months, said the Norwegian Oil and Gas Association on Thursday, adding that the industry maintains good potential despite increased costs.

As a result, investments are expected to increase to nearly €27 billion in 2014 before decreasing by 10% in the period 2015-2020. Annual investments should average a €20 billion in that period. 

“After almost a decade of declining production from the NCS, we are at another turning point where output has again begun to rise,” Bjørn Harald Martinsen, economics manager at the Norwegian Oil and Gas Association, commented.

In a note released on Thursday, Norway’s main industry group foresees increased efforts to make new discoveries.

“We are dependent on making new discoveries if this trend is to continue into the next decade,” explained Martinsen.

Norwegian Oil and Gas praised the government’s intentions to award new acreage for petroleum operations in the near future, claiming that a high and stable level of activity is the most important driver for further development of the oil and gas industry. 

COSTS: THE CHALLENGE

According to the organisation, cost trends and uncertain energy prices are the industry’s main challenges.

“Costs on the NCS increased sharply in the years before the financial crisis started, but this growth has recently moderated somewhat. Our estimates point to a continuation of this trend, and a moderate development in costs over the period up to 2018,” concluded Martinsen.