Since production started on the Norwegian continental shelf in 1971, oil and gas have been produced from a total of 115 fields. At the end of 2020, 90 fields were in production: 67 in the North Sea, 21 in the Norwegian Sea and two in the Barents Sea. Overall production from these fields in 2020 was 226.4 million standard cubic metres of oil equivalents (Sm3 o.e.), which is about 14 per cent lower than in the peak year 2004, but six per cent higher than in 2019.
For the next few years, total production on the Norwegian shelf is expected to remain relatively stable. Production from new fields that come on stream will compensate for the decline in production from aging producing fields. It is expected that production will increase after 2020, and that production in 2024 will be close to the record-breaking year 2004. Crude oil production in 2020 was somewhat lower than previously expected due to the authorities' decision to implement production cuts on the shelf. The government-determined cuts were implemented to help accelerate the stabilisation of the oil market.
It is expected that the ratio between produced gas and liquids (marketable oil, NGL and condensate) will decrease slightly in the next few years. While mostly oil was produced in the record year 2004, gas will account for almost half of the total production in 2024. In the long term, the number and size of new discoveries will be of crucial importance to the production level.
Historical and expected production in Norway, 1970-2025
Source: Norwegian Petroleum Directorate
At the end of 2020, 90 fields on the Norwegian shelf were in production. Several of the large, aging fields still have substantial remaining reserves. Moreover, the resource base for existing facilities increases when small, neighbouring discoveries are tied-in to the existing infrastructure. The activity level on producing fields will remain high in the years ahead. These fields will account for the bulk of production in the coming years.
It is also possible to increase recovery from many of these fields beyond existing plans. About 150 projects are currently being assessed to improve recovery from existing fields. It is important for the licensees to find profitable ways of improving recovery and making operations more efficient on existing fields. In addition, existing and new commercially viable discoveries need to be tied-in to existing infrastructure to utilise the production and transport capacity in mature areas in the years ahead.
See resource management in mature areas for more detailed information.
Production history and forecast distributed per resource category, 2015-2030
Source: Norwegian Petroleum Directorate (Gas is normalized at 40 MJ)
A large number of fields are in production and several new fields will come into production during the next few years. Therefore, it is expected that production will increase during the next few years and remain relatively high in the next decade.
See article about production forecasts for more detailed information.
Three new fields came onstream in 2020: Skogul in the North Sea and Ærfugl and Dvalin in the Norwegian Sea. At the end of 2020, production from Tor started again after a redevelopment of the field. In addition, a large improved-recovery project, Snorre Expansion, was put into production. At the year-end, nine field developments were ongoing: six in the North Sea, two in the Norwegian Sea and one in Barents Sea.
In addition, there were about 94 discoveries that are being, or could be, considered for development at year-end. Most of them are small and will be developed as satellites to existing fields. Stand-alone developments are planned for the largest discoveries, but several smaller discoveries could build new infrastructure through collaborated development solutions.
In 2020, the authorities approved three plans for development and operation (PDO): Goliat West in the Barents Sea and Balder Future and Hod Redevelopment in the North Sea.
The table below shows the estimated reserves in fields under development. Please note that the table is continuously updated.
Reserves in fields under development
All volumes in million Sm3 o.e.
Source: The Norwegian Petroleum Directorate
Johan Sverdrup is the third largest oil and gas field in the North Sea, situated 140 kilometres west of Stavanger. When the field was proven in 2010, it was the largest discovery made on the Norwegian shelf in the last 30 years. Total reserves from the field are about 425 million Sm³ o.e.
The field will be developed in several phases. Development of the first phase was approved by the authorities in 2015. Production from the first phase started in October 2019, nine years after the field was proven. The development plan for the second phase of construction was approved in May 2019 and the plan calls for production to start in the fourth quarter of 2022.
Operator Equinor reported that investment costs for the first phase of construction would amount to around NOK 103 billion. This entailed a break-even price of less than USD 20 per barrel. Investments for the second phase of construction, including the area solution, are estimated at about NOK 46 billion.
The field is currently mainly operated with power from shore. An area solution with power supply from shore will be established along with the Ivar Aasen, Gina Krog and Edvard Grieg fields. This will be in place no later than in 2022.
Power from shore helps to ensure oil production with low emissions to air. According to the operator, one barrel of oil produced on Sverdrup during the field’s first year released 0.17 kg CO2 – which means CO2 emissions that are nearly 100 times lower than the global average.
Daily oil production will be around 500,000 bbls/day. Production is expected to peak in the mid-2020s, after the second phase of construction comes on stream. At that point, the field is expected to account for more than 30 per cent of all Norwegian oil production.
In 2020, investment numbers increased to about NOK 155 billion, and are expected to fall by about NOK 10 billion in 2021. The temporary tax changes implemented by the Storting in the summer of 2020 have helped to counteract significantly reduced activity as a result of covid-19 and the demanding situation in the industry. Several ongoing projects, both related to new field developments and to fields in operation, will contribute to keeping the activity level relatively stable in the coming years.
See article about investments for more detailed information.
There will be a high activity level in the industry the coming years, and the petroleum industry will continue to be Norway’s largest and most important industry for the foreseeable future. New projects on fields in operation, as well as infill drilling, will result in a relatively high level of activity. In addition to the activities on existing fields, there are several new fields under development and others that are expected to be decided for development.
Significant exploration activity is expected in the next few years. At the same time, many new production wells will continue to be drilled. Commercially viable discoveries are required to ensure a stable activity level in the long term, and that requires maintaining exploration activity over time.