Norway expects decline in oil production, exploration

by The Associated Press

Oil production from Norway's offshore fields will decline by about 3.5 percent this year and remain at that level through 2006, the Norwegian Petroleum Directorate said Jan. 10.

The state agency's annual resource report also said exploration drilling was expected to hit its lowest level in 30 years, with just 15 wells planned in 2003, compared to 19 last year and 33 in 2001.

Norway, the world's third biggest oil exporter, has generally discovered more new oil than it produced annually in the more than 30 years of offshore activity.

"The total growth in resources from exploration activity is small compared to earlier years," the report said. It said the total additional petroleum found corresponds to about 10 percent of Norway's annual production.

The agency projected that Norway's offshore fields had a total of roughly 86 billion barrels of petroleum, measured in oil equivalents, when production started in 1971. Since then, it has pumped about 26 percent of the total recoverable petroleum, including oil and natural gas.

"For several years, there has been more oil produced than found on the Norwegian Continental Shelf," the report said. "In 2001 and 2002, there was less natural gas found than was produced."

The report said Norway has produced about 51 percent of its proven oil reserves and 18 percent of its proven natural gas reserves. That does not include new petroleum the directorate believes will be discovered or made recoverable by new technology in the future.

Norway is the second largest oil exporter, after Russia outside the Organization of Petroleum Exporting Countries. OPEC member Saudi Arabia is the world's largest exporter.