Norwegian Oil Production Down 11% in 2005
02 January 2006
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| Norwegian crude oil production. Click to enlarge. |
Preliminary figures from the Norwegian Petroleum Directorate for 2005 indicate that average daily production on the Norwegian Shelf dropped to around 2.5 million barrels per day in 2005, down 11% from 2.8 mbpd in 2004. Final figures will be available later in January.
The results mark a continued decline from the peak in 2000 of 3.14 million barrels per day (excluding condensate).
Norway is a major non-OPEC source of oil, and is a major exporter of oil and natural gas, especially to the European Union. The country has greatly benefited from its North Sea hydrocarbon wealth, and boasted a per-capita GDP of US$40,000 in 2004, one of the highest in the world.
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| Norway and the Arctic. Source: Arthropolis |
All of Norway’s oil reserves are located offshore on the Norwegian Continental Shelf (NCS), which, according to the US EIA, is divided into three sections: the North Sea, the Norwegian Sea and the Barents Sea.
The bulk of Norway’s oil production occurs in the North Sea, with smaller amounts in the Norwegian Sea. There is no current production and little exploration activity in the Barents Sea, due to high costs and environmental concerns. However, it is believed that the Barents Sea could contain sizable oil and gas reserves, and the Norwegian government has begun to grant licensing blocs in the area.
The report on the production decline in The Norway Post cited the reduction in exploration for new wells on the Shelf (in the Barents Sea) as the main reason for the reduced production, “mainly due to pressure from environmental organizations which want to protect oil-rich areas off the Norwegian coast where they fear that the fish stock and the environment will suffer from possible oil spills.”
The Norwegian Barents Sea holds an estimated 2.2 billion barrels of oil and 30 tcf of gas. Of these reserves, some 90% are yet to be discovered, according to an Arctic resource position paper by the WWF.
The Barents Sea is among the cleanest and most undisturbed oceans in the world. It has the world’s highest density of seabirds, some of the world’s richest fisheries and diverse and rare communities of marine mammals.
...WWF is worried about the environmental impacts of large scale petroleum impacts in the region and we are working to reduce them... We believe that to protect the most valuable and vulnerable areas in the region these areas must be designated no-go areas for the petroleum industry. Outside these no-go areas, state of the art technology must be applied and no emissions to water are acceptable.
The situation, in other words, sounds analogous to that of the Arctic National Wildlife Refuge (ANWR) in the US.
2.2 billion barrels sounds impressive, but if you do the math, it would only extend the lifetime of Norway's oil production by about 6 years:
estimated decline in production in the next 6 years: 1 mbpd = 365 million barrels per year
This means that 2.2 billion barrels are exhausted in 6 years. This is in the unrealistic scenario, where they quickly find and develop everything they hope to find. Conclusion: production of Norway will continue to decline quite rapidly, to at most 1.5 mbpd in 5 years. After that, perhaps a few years of production at that level, and in 15 years, forget about oil from Norway.
Posted by: Kris | 03 January 2006 at 12:29 AM
Is this a confirmation that 'Peak Oil' has been here for a few years? Is it reversable?
Posted by: Harvey D | 03 January 2006 at 11:33 AM
I wouldn't think so. It just means what it states, that the Norwegian fields have peaked. US production peaked in 1970 but global output has been rising ever since. If some radical new oil extraction technology came along it would be possible to reverse the production numbers... for a while. It looks like 2006 will see a rise in global production to around 85 million barrels/day. If those numbers are obtainable then peak oil will not have arrived. Even if current production is unable to meet the demand that doesn't mean that we've hit peak oil.
Posted by: Tripp Bisop | 03 January 2006 at 12:57 PM
Each field is a unique entity--so peaking in one area, even a major area, doesn't mean peak global production. Analysts have been speculating for a couple of years now that Norway has peaked, so it's not a surprise, although the accelerating drop might be. Certainly the North Sea is characterized, even by the Norwegians, as "mature."
But, on the other hand, it does provide a further example of the concept of peak production (as did the original experience in the US). To outrace the depletion curve, Norway in particular, and the world in general, would need to (a) find a heck of a lot more oil and/or (b) dramatically increase recovery rates.
(Norway is also a good to examine because it provides historical field by field production data--which is where the chart above came from.)
The importance of (a) is why there is so much discussion about the lack of major discoveries--discovery peaked decades ago.
As to enhanced recovery from existing resources, Norway reported a 46% recovery factor at the beginning of the year (up from 35% in 1991). Methods that might push that to 49% are under evaluation, according to the Petroleum Directorate.
Posted by: Mike | 03 January 2006 at 03:54 PM
Doesn't Russia have a valid claim in most of the Barents Sea? They have never hesitated to ignore environmental considerations.
Posted by: tom deplume | 03 January 2006 at 05:18 PM
Yes, Russia is the other major Barents Sea player.
Posted by: Mike | 03 January 2006 at 05:34 PM
Could accelerated transistion to sustainable alternative energy by major users like USA, EU, China, Japan, India, Russia, Brazil, Canada etc extend or push-back peak oil by a few decades? Will it be done or will we keep pumping to the last drop before seriouly considering other sources and more efficient uses.
Posted by: Harvey D | 04 January 2006 at 09:26 AM
Probably both. You'll see a lot fewer trucks and SUVs on the road near and after that time. public transporation will probably use a lot more biodiesel. Plugin hybrids will hit the scene. The trucking industry will get hammered... hard. The price of everything will go up for a while and then as ingenuity comes to fruition the prices will come back down. I'm guessing that it'll hurt, but we'll have taken at least a few, somewhat lame, steps to migigate the problem beforehand and that'll be worth something. Around that time look for people everywhere to say "screw the environment, we need cheap fuel". Oil shale and tar sand development will step up, but I doubt that these things will really help maintain the status quo. Coal to liquids will probably get really popular. Ultimately though, greener technologies will be cheaper and displace the dino fuels.
Posted by: Tripp Bisop | 04 January 2006 at 03:14 PM
You bethca Peak Oil is here! The taps cant be open any wider and china and India want all they can get. Less oil, more users...going to get interesting around 2015
Posted by: Stan Riff | 06 January 2006 at 08:33 AM