We expect that one fourth of Norway’s income in 2010 will be generated from oil and gas. The petroleum industry finances a large part of the Norwegian welfare state and provides us with economic flexibility, says Terje Riis-Johansen, Minister of Petroleum and Energy.
- We expect that one fourth of Norway’s income in 2010 will be generated from oil and gas. The petroleum industry finances a large part of the Norwegian welfare state and provides us with economic flexibility, says Terje Riis-Johansen, Minister of Petroleum and Energy.
In the Revised National Budget for 2010 the average price of Norwegian crude oil is estimated at NOK 475 per barrel in 2010. This is an upward adjustment of NOK 50 per barrel compared to the National budget.
The average oil price has so far this year been just slightly below USD 80 per barrel. The demand for oil is now increasing, after a decline last year. The increasing oil demand is especially visible in growth economies such as China.
The State’s net cash flow from the petroleum sector is estimated at NOK 261 billion in 2010. Out of the total cash flow, taxes and fees constitute NOK 155 billion, the net cash flow from the State Direct Financial Interest (SDFI) is at NOK 94 billion and dividend from Statoil is at NOK 13 billion. The net cash flow is upward adjusted with NOK 41 billion.
Total oil production (including NGL and condensate) is estimated at 2.2 million barrels per day in 2010, a decline of 4.5 percent from 2009. While the oil production is on decline, the gas production is increasing. The gas sale in 2010 is estimated at 105 billion cubic meters and is expected to continue to increase the next years.
The investments in the petroleum industry are important for the Norwegian economy and vital for the existence of an international competitive supply industry. Despite the economic uncertainty following the financial crisis, the investment level on the Norwegian continental shelf has been high the last years. Including exploration costs, total investments in 2010 in the Revised national budget are estimated at NOK 134 billion. This is 2.5 percent lower than in 2009.
- A strong focus on increased recovery in already producing fields, gradual exploration in areas that are already open for petroleum industry and access to new acreage are all important factors we need to consider to ensure a long-term development on the Norwegian continental shelf. I will do my part to ensure that our most important industry will continue to generate income and positive effects for Norway in future decades, says Terje Riis Johansen, Minister of Petroleum and Energy.
The income generated from the petroleum industry has provided Norway with a considerable financial wealth. By the end of 2009 the market value of the Government Pension Fund Global was approximately NOK 2 640 billion. The petroleum industry also accounts for a large part of Norwegian exports; the export value of crude oil, natural gas and pipeline transport service is expected to be close to NOK 500 billion in 2010.
The total recoverable resources at the Norwegian Continental Shelf amount to approximately 13.4 billion standard cubic meters oil equivalents. Since the start-up of oil activities in Norway, roughly 40 per cent of these resources have been produced.
As of today more than half of the total expected oil resources and one quarter of the gas resources have been produced.