This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 7/22/2019

The petroleum sector is a key driver for the Norwegian economy.  It is the country’s single largest industry.  The sector accounts for 16% of GDP, 20% of total investments, 21% of state revenues, and 40% of total exports.  Norway is the world´s 3rd largest exporter of natural gas, and the 13th largest exporter of oil.  Indirectly, the petroleum sector contributes around 200,000 jobs throughout Norway.  Norway's oil production peaked in 2001 at 3.4 million barrels per day (bpd) and has declined to the current level of around 1.7 million bpd.  Production is expected to remain relatively stable this year but will increase again once the large, new Johann Sverdrup field comes into production at the end of 2019.

Despite the cyclical nature of this sector, downturns in oil and gas prices and high cost constraints that have emerged over the recent years, the mood in Norway’s petroleum industry remains cautiously optimistic.  The Norwegian oil and gas industry sector is global in nature.

Norway has had several significant oil and gas discoveries in the past few years, including the giant Johan Sverdrup field, which will require major investments and create new jobs in the industry.
 
In May 2019, the Norwegian Ministry of Petroleum and Energy announced Awards in Predefined Areas (APA) 2019. In this licensing round, the APA acreage has been expanded with 90 blocks: five in the North Sea, 37 in the Norwegian Sea and 48 in the Barents Sea.  The application deadline for APA 2019 is August 27, 2019, and it is expected that new production licenses will be awarded in early 2020.  More information on the APA 2019 announcement can be found on the Norwegian Petroleum Directorate's website:  APA 2019

In June 2017, the Norwegian Ministry of Petroleum and Energy announced the 24th licensing round in frontier areas on the Norwegian Continental Shelf (NCS).  The licensing round includes a total of 102 blocks.  Nine blocks are located in the Norwegian Sea and 93 in the Barents Sea.  In June 2018, the Ministry awarded 12 new licenses in 47 blocks on the NCS.  Nine of the licenses are located in the Barents Sea, while three are located in the Norwegian Sea.  Eleven companies were offered participating interest and six of them were offered operatorships.  The licenses are awarded on the condition that the companies commit themselves to a work program for the coming exploration activity.

Resource accounts with estimates of both produced and remaining resources show that there are 8.3 billion standard cubic meters (scm) of oil equivalents (oe) left to be produced on the NCS.  During its 50 years of production, Norway has depleted about 7.3 billion scm oe – or 47% of its total resources.

The vast majority of Norway’s gas exports are destined for Europe.  Norwegian gas accounts for about 20% of total European gas consumption.  Norway supplies almost 40% of the UK’s gas consumption, and Norway also provides substantial amounts of gas to Germany and France.

Oil and gas production in Norway is only offshore.  While there are significant onshore processing facilities, there is no onshore production.  The average estimated recovery factor for oil on the NCS is now close to 50% after steady increments during the last decade.  Many of the fields that are producing today are of such a magnitude that even a small increase in the recovery factor will yield substantial extra oil volumes.
 

Leading Sub-Sectors

Leading sub-sectors for U.S. suppliers continue to be increasingly advanced drilling and well completion technologies.  Key areas continue to be zero-surface, subsea and deep water technology; advanced technology facilitating remote/onshore, real-time operations, and solutions advancing the e-field, reducing the need for transportation and the number of personnel having to stay on offshore platforms; unmanned systems and ROVs; innovative solutions for improved recovery and marginal field technology; LNG technology/gas value chain, incl. technology facilitating more efficient and clean production and transportation of gas from remote locations; as oil and gas fields are depleted and production ceases, investments are also needed on abandonment or alternative use of installations.

There is growing overlap with other industry and technology sectors, e.g. how to operate in extreme conditions using increasingly advanced technology, sensors and intelligent tools.  An example of this is learning and sharing best practices with leaders in robotics, space technology, medical technology, etc.
Most purchases for the offshore industry stem from Norwegian and international oil companies operating on the NCS and from local yards and offshore structure contractors building and maintaining offshore installations.  There is extensive use of engineering, procurement and construction (EPC) contracts.  Most of these major contracts are channeled through Norwegian and international offshore engineering and service companies developing the NCS.

Publicly listed Equinor ASA, with a 67% Norwegian Government ownership share, controls approximately 80% of the operatorships on the NCS.  Equinor is a Fortune 50 company and is the largest company in the Nordic Region by revenue.

Most of the U.S. oil majors and large service companies are present on the NCS: ConocoPhillips, ExxonMobil,  Halliburton, TechnipFMC, National Oilwell Varco, Schlumberger, Baker-Hughes/GE, Cameron, Weatherford, etc.

Opportunities

Investment and operating costs have remained high on the NCS in recent years.  The Norwegian government emphasizes that the oil industry needs to strive to make their exploration activities as efficient and cost-effective as possible while at the same time showing due consideration for the environment and the fisheries, especially since exploration and drilling activities are moving further north and into more coastal areas.  The remaining resources on the NCS are gradually becoming more difficult to produce, both technologically and commercially.  The industry’s development and implementation of new and cost saving technologies, e.g. within seismic surveys, interpretation of seismic data, drilling, and subsea production, will be of crucial importance in this regard.  Also of great significance is the information sharing and innovation linking the petroleum sector with sectors such as information and communication technology, maritime industries, finance, and other Norwegian energy industries.

The NCS is divided into three petroleum provinces, the North Sea, the Norwegian Sea, and the frontier Barents Sea.  Norway continuously seeks new and proven technology to be used in the deeper and more extreme northern waters. 

Norway is a mature market for the oil and gas sector as it has been producing oil and gas from the North Sea for decades.  The challenge that U.S. companies face is the competition from well qualified domestic and regional equipment and service suppliers.

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