Norway falls out of oil's 'Top 10'
December 17, 2009
Norway is no longer among the world’s 10 largest oil producers. New figures show that while Norway was ranked as the world’s third-largest oil exporter just a few years ago, it’s now fallen to 11th place as a producer, with few prospects for resurgence.
Newspaper Dagens Næringsliv (DN) reported this week that Norwegians likely will need to adjust to less revenue flowing into state coffers from its offshore oil rigs.
In 2001, Norwegian oil production hit 3.3 million barrels a day, meaning Norway ranked behind only Saudi Arabia and Russia as an oil exporter.
By 2008, the Energy Information Administration (EIA) of the US ranked Norway in sixth place among the world’s top oil exporters. The United Arab Emirates, Iran and Kuwait had joined Saudi Arabia and Russia in moving beyond Norway on the exporters’ list.
Now Norway ranks 11th as an oil producer, pumping up 2.46 million barrels a day. It’s now behind Saudi Arabia, Russia, the US, Iran, China, Canada, Mexico, the United Arab Emirates, Kuwait and Venezuela. Brazil is in 12th place, according to the EIA.
In eight years, production from the Norwegian sector of the North Sea has fallen by 1.3 million barrels a day. Some analysts think Norwegian offshore production will soon struggle to hit even 2 million barrels a day.
The drop in production comes as no huge surprise, according to Dagens Næringsliv . Professor Petter Osmundsen of the University of Stavanger, in Norway’s west coast oil capital, notes that politicians haven’t dealt out new exploration licenses in completely new sectors of Norwegian territory since 1994.”On the other hand, the industry has had more than enough to do in recent years,” Osmundsen told DN. “Perhaps it’s good that the oil industry has used its energy to exploit the mature oil fields to the max.
“But there’s a balance here between old fields and new possibilities.”
One revenue comfort has been steadily rising Norwegian production of natural gas. Prices are relatively low at present, though, and global access to gas appears greater than earlier estimated.
Statoil, Norway’s biggest company, meanwhile, has been busily diversifying into oil operations far from Norwegian territory, from the Gulf of Mexico to, just recently, Iraq. The idea is to put Norwegian oil expertise to work overseas and pump up revenues from abroad. to offset declining production at home.
Some argue that Norway produced too much oil at its height eight years ago. Domestic production grew to three times what the Parliament had envisaged in the 1970s, when the industry was emerging.
Osmundsen told DN that it’s difficult to claim Norway should have held back. “We have built up a large fortune, and we are now diversifying that fortune,” he said. “You can also argue that Norway had been too one-sided with its oil industry.”