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Norway trims 2005 oil, gas production forecast

OSLO: The world’s third-biggest oil exporter Norway trimmed on Friday its forecast for total 2005 oil and gas production to match the 2004 level but said output would grow through 2008 due to rising gas volumes.

The Norwegian government pared its forecast for 2005 oil production, including natural gas liquids (NGL), to 3.2 million barrels per day from an earlier projected 3.3 million bpd. The new figures came in a revised national budget for this year.

The oil figure was cut due to continued delays in restoring the 130,000 bpd Snorre field to full capacity after a gas leak shut it in late 2004 and technical glitches on a few other fields, the energy ministry’s spokeswoman said.

“Oil production is expected to remain at this level over the next years, but then gradually decline,” the Oil and Energy Ministry said in a statement with the revised 2005 budget, which showed a large oil-backed surplus.

The downward adjustment in oil lowered the forecast for combined 2005 oil and gas output to 264 million standard cubic metres of oil equivalent from an earlier 271 million, and flat at the 2004 level, the government said in the budget.

“Gas sales in 2005 are estimated to be approximately 80 billion standard cubic metres,” the oil ministry said. The figure is up from 78.5 billion cubic metres in 2004.

Total oil and gas output is forecast to rise to 278 million standard cubic metres of oil equivalent in 2009, with the growth coming from gas while oil would rise to 2006 and then fall.

Gas production would climb to 117 billion cubic metres in 2009, but oil and NGL output would fall to 162 million cubic metres of oil equivalent, the government said. One billion cubic metres of gas equals 1 million cubic metres of oil equivalent.

Peak seen in 2008: Norw-ay’s total petroleum production, including oil and gas, would peak in 2008 and then begin to fall gradually due to falling oil, the budget said, but did not give 2008 figures.

Norway found oil off its shores at the end of the 1960s. Production from existing oilfields is tapering off, but gas output is rising, and the country’s biggest current offshore projects are the Ormen Lange and Snoehvit gas developments.

“Gas sales are expected to rise towards a long-term level of 120 billion cubic metres per year from 2011, the oil and energy ministry said.

Non-OPEC Norway is the world’s third biggest oil exporter after Saudi Arabia and Russia and western Europe’s largest gas producer. It is the world’s seventh biggest oil producer.

The oil and gas industry contributes about a fifth of Norway’s gross domestic product.

The government hiked its assumption for the average crude oil price in 2005 to 300 Norwegian crowns ($46.82) per barrel from 230 crowns and raised its 2006 forecast to 280 crowns per barrel from 210.

The price assumptions are more a budgetary tool than a real forecast of market prices. Towards around 2011 oil prices would approach an assumption of 180 crowns per barrel given in the budget in October, which the goverment said was in line with projections of authorities abroad such as the International Energy Agency.

Investment in the petroleum sector is likely to rise in 2005 to a record 84.7 billion crowns from 69.6 billion in 2004, matching a previous record from 1998, the budget said.

“The high level of investment is to a large extent due to development of the fields Ormen Lange, Snoehvit and Kristin,” the oil ministry said. reuters

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