In the 50 years since Norwegian petroleum activities began, about 48 per cent of the estimated total recoverable resources on the continental shelf have been produced and sold. Thus, there are large remaining resources, and it is expected that the level of activity on the Norwegian shelf will continue to be high for the next 50 years as well.
In 2019, Norway produced 214.0 million Sm³ of marketable oil equivalents (Sm³ o.e.). By comparison, total production was 227.3 million Sm³ o.e. in 2018 and 264.2 million Sm³ o.e. in the record year of 2004.
Oil production was five per cent lower in 2019 than in the previous year. The natural decline in production from mature fields was not compensated for by new fields coming on stream throughout the year. At the end of the year, however, there was a considerable production increase due to the start-up of the Johan Sverdrup field.
Gas production was high in 2019. Total sales of gas amounted to 115.2 billion Sm³ (113.2 billion Sm³ 40 megajoules of gas), about five per cent lower than in 2018. In 2019, natural gas accounted for just above 50 per cent of the total production by oil equivalents.
Due to the extraordinary situation associated with Covid-19 and the falling demand for oil, the Norwegian authorities have decided to cut crude oil production in order to help stabilise the oil market more quickly. Norway has decided to cut production by about 40,000 Sm³ o.e. per day in June and slightly over 21,000 Sm³ o.e. per day for the second half of 2020. The curtailment will expire at the end of 2020.
Historical production figures and production forecasts split by product type category are shown in the figure below.
Historical and expected production in Norway, 1970-2024
Source: Norwegian Petroleum Directorate
The production profile of a typical oil field shows a rapid increase to a maximum production rate, then a stable period of production (the plateau phase) followed by a gradual decline in production. Without further investments, oil production will decline rapidly, and even with considerable investment to improve recovery, it can be difficult to maintain production from a field.
Without new fields or large-scale investments on existing fields, oil production from the Norwegian shelf would continue to decline. Given the high level of development activity on the shelf in recent years, oil production is expected to increase considerably in 2020, even with curtailment of (regulated) crude oil production, followed by a lesser increase during the following years. Production from new fields that come on stream will compensate for the decline in production from aging fields. The future production level is uncertain, and that has been reinforced by Covid-19 and low oil prices. It depends on initiatives that are implemented on the fields, discoveries that are decided to be developed, and when they come on stream. New discoveries, how large they are, and how and when they are developed will also affect the production level over time.
The figure below shows total historical production and production forecasts until 2030, distributed by maturity of the resources.
Production history and forecast distributed per resource category, 2015-2030
Source: Norwegian Petroleum Directorate (Gas is normalized at 40 MJ)