Value of Norway's oil and gas fields falls by $50 billionStaff writer ▼ | June 14, 2016
The value of Norway's state-owned oil and gas fields has dropped by roughly a third in two years, or by more than $50 billion, mainly reflecting tanking oil and gas prices, the government said.
Oil exploration A report from oil-data firm Rystad Energy
A report from oil-data firm Rystad Energy estimated the value of Norway's direct ownership in oil and gas fields at 810 billion Norwegian kroner ($97.9 billion), down from 1.23 trillion kroner in a similar estimate two years ago, the government said.
"As a consequence of a gas-heavy portfolio and high expected gas production [in the next few years], the reduced gas price expectation is the single most important driver of the reduction in portfolio valuation from 2014 to 2016," said Rystad Energy in the report.
The Norwegian government owns stakes in a huge portfolio of oil and gas fields in the North Sea, the Norwegian Sea and the Barents Sea, including aging giants like the Troll and Oseberg fields, and the Johan Sverdrup field, which is still under development. The stakes are managed by state-owned Petoro AS.
Last year, Norway's derived half of its oil and gas revenue from production taxes, 43% from the government's direct ownership in oil and gas assets, and 7% from dividends paid by Statoil ASA, in which the government has a 67% stake.
Rystad Energy said it expected European demand for natural gas to remain weak toward 2020 amid competition from coal power and renewable energy, but expects the gas market to tighten in the longer run.
Government-owned oil and gas fields contributed 27% of Norway's total oil and gas output in 2015, or about one million barrels of oil equivalent a day. Production is expected to remain largely flat until 2024 and then fade gradually, Rystad Energy said. ■