Norway cuts 2008 oil production forecast

Norway has revised its oil production forecast for 2008 to 2.4 million b/d—down from the previous projection of 2.5 million b/d—in its revised budget for this year.

Uchenna Izundu
International Editor

LONDON, May 20 -- Norway has revised its oil production forecast for 2008 to 2.4 million b/d—down from the previous projection of 2.5 million b/d—in its revised budget for this year. The estimate includes natural gas liquids and condensate.

The Norwegian energy ministry said it expected oil production to continue falling because of maturing Norwegian continental shelf fields.

However, gas production will increase, with gas sales at 100 billion cu m in 2008—estimated to be 10% higher than 2007 sales. In 2009 gas sales are expected to increase to about 110 billion cu m.

Operators have planned 125 billion kroner investment in 2008, including exploration, which also is 10% higher than 2007.

The ministry is eager to encourage investment to ensure long-term development of the shelf. The country has produced about a third of the expected recoverable petroleum resources, with more oil coming on stream than gas.

"As of today approximately half of the total expected oil resources have been produced," the ministry said. "The remaining resources are mainly connected to existing fields, or they have yet to be discovered."

The government expects to receive 356 billion kroner net cash flow from the petroleum industry in 2008 because of the high oil prices.

Future oil prices are uncertain, the ministry added, because of the weakening US economy, which has had a reduction in oil demand.

"On the other hand there is little spare capacity, and uncertainty [is] linked to the supply of oil from several countries. Increased capital flows into oil and other commodities from investment funds have also had an impact on the market price for oil."

Contact Uchenna Izundu at uchennai@pennwell.com.

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