Norway budgets $17.6 billion for NCS work in 2007
Norway expects operators will spend $17.6 billion on the Norwegian Continental Shelf in 2007, according to the revised 2007 national budget.
LONDON, May 24 -- Norway expects operators will spend $17.6 billion on the Norwegian Continental Shelf in 2007, according to the revised 2007 national budget published by Norway's petroleum ministry. The sum is $2.2 billion higher than the last estimate in its national budget for 2007.
The ministry said that investment is expected to rise over coming years and attributed the difference to escalating well costs. Production and exploration wells as well as average well costs have all increased since the 2007 national budget was published, it added.
Average Norwegian oil prices are expected to be $61/bbl for 2007 and $58/bbl for 2008 under its revised national budget. The Organization of Petroleum Exporting Countries has reduced its production twice in the last 6 months, and the cartel appears to be aiming for a price of $55-60/bbl, the ministry said.
According to the revised national budget, Norwegian oil production, including natural gas liquids, is expected to be 2.6 million b/d in 2007, which would be "slightly lower than the production in 2006," the ministry said. However, production should rise in 2008, although the ministry did not indicate by how much, and this would gradually trail off in the following years.
The ministry also has reduced slightly its figures for gas sales. Norway should sell 93 billion cu m in 2007 and 109 billion cu m in 2008. Gas sales should increase once production from delayed projects comes on stream after 2008.
Odd Roger Enoksen, Norway's minister of petroleum and energy, said Norway is expected to sell more than 90 billion cu m of gas to Europe in 2007.
The ministry estimates that the state's net cash flow from the petroleum sector will be $49.9 billion in 2007, down $10 billion compared with the original estimate in the 2007 national budget. The reduction is the result of reduced oil price estimates, lower production, increased investments, and a rise in operating costs.
The revised budget, presented to Norway's parliament The Storting on May 15, outlines the government's plan to implement economic policy and projections for the revised Norwegian economy.
Contact Uchenna Izundu at firstname.lastname@example.org.