Norway Has More Problems Than $40 Oil -- March 31, 2016

Updates

June 27, 2020: Norway's giant field pumps "flat out."

February 4, 2019: Bloomberg update.

January 2, 2019: Norwegian production to fall to 30-year low.

December 8, 2018: from Equinor's website, this date -- Johan Sverdrup—the North Sea giant Johan Sverdrup is one of the five largest oil fields on the Norwegian continental shelf.

With expected resources of between 2.1—3.1 billion barrels of oil equivalents, it will also be one of the most important industrial projects in Norway in the next 50 years. The development and operation of this enormous field will generate revenue and provide jobs for coming generations.

August 6, 2017: Lofoten Islands and $65 billion in oil off-limits to oil companies.

Original Post 

There was a long story yesterday about the problems the Norwegian economy has secondary to the oil and gas industry in their neck of the woods. Here are data points from the original article:

First problem: $40 oil.

Second problem: discovery wells disappointing.

• 2015: discovery wells off Norway averaged 5 million bbls of oil and gas
• for past 25 years: discovery wells off Norway have averaged 27 million bbls of oil and gas 
• dismal results due in part to depletion of the reserves in the North Sea
• Norway's oil production has shrunk by half since 2000
• Norway has the world's biggest sovereign wealth fund; in January, 2016, the government made its first withdrawal from the fund since it was set up in the 1990s

Third problem: challenges going where the oil is.

• operators are giving up on the Arctic around Alaska and Greenland
• operators now looking to the Arctic areas around Norway and bordering Russian waters
• Norway planning to award licenses in an area known as the Barents Sea Southeast
• apparently these Arctic waters are less hostile (due to the Gulf Stream); also shallower and mostly ice-free
• Barents Sea Southeast
• bilateral border order agreement reached with Russia in 2010
• drillers have started drilling discovery wells
• oil companies will cut spending for third consecutive year
• will drill only half as many exploration wells in 2016 as in 2015
• CAVE dwellers not happy

Johan Sverdrup field: not in the Barents Sea, but in the North Sea

• the largest discovery "in" Norway in recent years; discovered by Lundin in 2010
• could hold as much as 3 billion bbls of oil (I assume that's "recoverable," not OOIP)