Record volumes of gas produced is one of the main reasons why cash flow from the State’s Direct Financial Interest (SDFI) on the Norwegian continental shelf (NCS) in the first nine months of 2012 increased by NOK 17.9 billion from the same period of last year.
Net cash flow thereby reached NOK 115.1 billion. A record 38.5 billion cubic metres of gas were sold from the SDFI in the gas year from 1 October 2011 to 30 September 2012. Gas revenues for the first nine months increased by 32 per cent from last year.
The record gas sales primarily reflected reduced imports of liquefied natural gas (LNG) to Europe, which gave room for higher exports from Norway.
Income after financial items for the SDFI totalled NOK 110.4 billion for the first nine months, up by 16.8 per cent from the corresponding period of 2011. Oil and gas production averaged 1 093 000 barrels of oil equivalent per day (boe/d), an 11 per cent increase from the first nine months of last year. Gas production was up by 21 per cent, while output of oil and natural gas liquids (NGL) declined by just 0.8 per cent.
Kjell Pedersen, chief executive of Petoro, is very satisfied with results so far this year. “The state’s direct investments in the oil and gas industry continue to show results which any company might envy. I believe it’ll be important that this is borne in mind by those responsible for awarding new licences over the next few years. It’s also very positive that oil production has remained at the same level as 2011. The challenge for the future will be to ensure that this continues.”
Operating income for the third quarter came to NOK 30 billion, compared with NOK 29.5 billion in the same period of 2011. Net cash flow was NOK 30.6 billion, up by four per cent from the third quarter of last year. Total oil and gas production for the third quarter averaged 958 000 barrels of oil equivalent per day (boe/d), compared with 879 000 for the same period of 2011.
Work done by Petoro during the third quarter shows that 1 000 new production wells need to be drilled in fields with a direct state interest in order to get out their reserves and improve recovery.