Norway still has vast proven natural gas resources without development plans, the Norwegian Petroleum Directorate (NPD) said on Wednesday, urging exploration companies to find ways of producing it despite technological challenges.
As this year's COP28 U.N. climate talks focuses on the first global agreement to phase out fossil fuel use, Norway argues it will keep producing oil and gas, which it says has fewer emissions during production compared with others, as long as there is demand and output will naturally ebb from early 2030.
Natural gas resources equating to some 860 billion standard cubic metres (bcm) are trapped in so-called tight reservoirs with low permeability in Norwegian offshore territory, according to NPD estimates.
However, production from tight reservoirs is frequently only profitable if the development is based on tie-backs to existing infrastructure with a long production horizon, the NPD said in a statement.
But time is of the essence in producing these resources before the end of the lifetime of the infrastructure they are tied to, said Arne Jacobsen an assistant NPD director.
"We need to ensure that these values are not lost, and that the companies are doing enough to produce the difficult volumes as well," Jacobsen added.
Companies should work together and "leave no stone unturned" to determine if it is possible to produce remaining resources profitably with existing technology, he said.
"We encourage the companies to think outside the box and work across fields – and thereby achieve potential economies of scale," Jacobsen added.
State-owned Equinor is the biggest oil and gas producer in Norway, while Aker BP, Vaar Energi and Shell among others also have sizeable operations.
According to the NPD, about 65% of overall Norwegian gas resources have yet to be produced, but difficult geographic conditions and a lack of gas infrastructure capacity, particularly in the Barents Sea, hampered full utilization.
Current plans suggest Norwegian gas production will be maintained at a high level over the next five years before declining at a fairly rapid rate, the NPD said.
In 2022, Norwegian gas production rose by 9 billion cubic meters (bcm) to a near-record 122 bcm, as the country stepped up activity to help replace lost Russian supplies to Europe.
(Reuters - Reporting by Nora Buli, editing by Terje Solsvik and David Evans)
Subscribe
