Norway’s oil industry hides behind flagship project: Fuel for Thought

The imminent start of production from Norway’s giant Johan Sverdrup field this autumn has obscured some big challenges facing the country’s oil industry. State-controlled Equinor has been trumpeting its progress on the 2.6 billion barrel oil project, due on stream in November, and particularly the reductions in its expected price tag by more than a third to NOK127 billion ($14.5 billion). Production from Johan Sverdrup should ramp up to 440,000 b/d in the first year, with a second phase after that, alleviating a steep decline in the country’s oil output. Norway’s oil production has fallen 10% since 2016, and according to the International Energy Agency is set to drop 6% this year. Those rates have exceeded the forecasts of the Norwegian Petroleum Directorate. But success with one project, albeit large, will only count for so much. Equinor changed its name from Statoil last year to reflect a shift away from oil, but the rebranding doesn’t solve deep-seated challenges for the company and the regulatory system. While the likes of BP and Shell have slimmed down their portfolios to focus on big projects that play to their strengths, and expand in LNG, Equinor has insisted on hanging on to fields all… continue reading

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