In the Focus Norway Edition for the oil and gas sector, I have already written two articles. The first article explained the Norwegian energy sector through infographic and the second article elaborated on the importance of the energy sector from an economic perspective.
The third article on the Norwegian energy sector will focus on the region's resources growth and production profile (historical and expected).
To put things into perspective, the first chart below gives the accumulated resources in the Norwegian Continental Shelf between 1966 and 2015.
While resources surged from the period 1966 to 1990, growth in accumulated resources in the NCS has moderated in the recent past. I still don't see it as a major concern if oil and gas prices trend higher, but there will be an increasing number of mature to declining assets in the next decade if new resources find remains sluggish.
The point that I am trying to make is clear from the second chart below that gives the gross resources growth and number of wildcats completed during the period 1990 to 2015.
Between 1990 and 2000, the annual resources growth averaged 140 million Sm³oe. However, for the period 2000 to 2015, the annual resources growth averaged just 96 million Sm³oe. Further, between 1990 and 2015, there have been just two big discoveries with Johan Sverdrup being the latest one.
This data might not reflect the impact on a standalone basis and therefore the third chart below shows the historical and expected oil and gas production in Norway (1980 to 2020).
Oil and gas production in Norway peaked out in 2004, and production in 2015 was 14% below 2004 production. Further, production expectation for 2020 is 20% below 2004 production and this data underscores my point that production profile can potentially continue to decline as increasing number of assets mature and the pace of new discoveries declines.
As I mentioned above, higher oil and gas prices can offset this factor in the coming decade, but Norway's oil reserves growth is a concern for long term. In the next 10-15 years, Johan Sverdrup, delivering first oil in 2019 can potentially offset decline in production from mature assets.