FRACTIONAL FLOW

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Archive for the ‘Norway’ Category

Norwegian Crude Oil Reserves And Extraction per 2016

In this post I present actual Norwegian crude oil extraction and status on the development in discoveries and reserves and what this has now resulted in for expectations for future Norwegian crude oil extraction.

This post is also an update of an earlier post about Norwegian crude oil reserves and production per 2015.

Norwegian crude oil extraction peaked in 2001 at 3.12 Million barrels per day (Mb/d) and in 2016 it was 1.62 Mb/d, growing from 1.57 Mb/d in 2015 and 1,46 Mb/d in 2013 (a growth of 10% since 2013).

The Norwegian Petroleum Directorate’s (NPD) recent forecast expects crude oil extracted from the Norwegian Continental Shelf (NCS) to become 1.60 Mb/d in 2017.

Figure 01: The chart shows the historical extraction (production) of crude oil (by discovery/field) for the Norwegian Continental Shelf (NCS) with data from the Norwegian Petroleum Directorate (NPD) for the years 1970 – 2016. The chart also includes my forecast for crude oil extraction from discoveries/fields towards 2030 based on reviews on individual fields, NPD’s estimates of remaining recoverable reserves, the development/forecast for the R/P ratio as of end 2016.
Further, the chart shows a forecast for total crude oil extraction from sanctioned discoveries/fields (green area, refer also figure 02) and expected contribution from Johan Sverdrup phase I (blue area) [at end 2016 estimated at 1.78 Gb; [Gb, Giga (Billion) barrels, refer also figure 07] and this development phase is now scheduled to start flowing in late 2019.

Sanctioned Developments in Figure 01 represents the total contributions from 7 sanctioned developments of discoveries now scheduled to start to flow between 2017 and 2019.

My forecast for 2017 is 1.51 Mb/d with crude oil from the NCS.

My forecast shown in figure 01 includes all producing and sanctioned developments, but not contingent resources in the fields (business areas). The forecast is subject to revisions as the reserve base becomes revised (as discoveries pass the commercial hurdles) the tail is likely to fatten as from 2022/2023 mainly due to Johan Sverdrup phase II and Johan Castberg (Barents Sea).

My forecast includes about 7% reserve growth (300 Mb) for discoveries in the extraction phase, but does not include the effects from fields/discoveries being plugged and abandoned as these reach the end of their economic life.

Discoveries sanctioned for development and Johan Sverdrup (with an expected start up late 2019) is expected to generally slow down the decline in Norwegian crude oil extraction.

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Norwegian Crude Oil Reserves And Extraction per 2015

In this post I present actual Norwegian crude oil extraction and status on the development in discoveries and reserves and what this has now resulted in for expectations for future Norwegian crude oil extraction.

This post is also an update of an earlier post about Norwegian crude oil reserves and production per 2014.

Norwegian crude oil extraction peaked in 2001 at 3.12 Million barrels per day (Mb/d) and in 2015 it was 1.57 Mb/d, growing from 1.51 Mb/d in 2014.

The Norwegian Petroleum Directorate’s (NPD) recent forecast expects crude oil extraction from the Norwegian Continental Shelf (NCS) will decline to 1.53 Mb/d in 2016.

Figure 01: The chart shows the historical extraction (production) of crude oil (by discovery/field) for the Norwegian Continental Shelf (NCS) with data from the Norwegian Petroleum Directorate (NPD) for the years 1970 - 2015. The chart also includes my forecast for crude oil extraction from discoveries/fields towards 2030 based on reviews on individual fields, NPD’s estimates of remaining recoverable reserves, the development/forecast for the R/P ratio as of end 2015. Further, the chart shows a forecast for total crude oil extraction from sanctioned discoveries/fields (green area, refer also figure 02) and expected contribution from Johan Sverdrup (blue area) [at end 2015 estimated at 1.76 Gb; [Gb, Giga (Billion) barrels, refer also figure 06] and this development phase is now scheduled to start flowing in late 2019.

Figure 01: The chart shows the historical extraction (production) of crude oil (by discovery/field) for the Norwegian Continental Shelf (NCS) with data from the Norwegian Petroleum Directorate (NPD) for the years 1970 – 2015. The chart also includes my forecast for crude oil extraction from discoveries/fields towards 2030 based on reviews on individual fields, NPD’s estimates of remaining recoverable reserves, the development/forecast for the R/P ratio as of end 2015.
Further, the chart shows a forecast for total crude oil extraction from sanctioned discoveries/fields (green area, refer also figure 02) and expected contribution from Johan Sverdrup (blue area) [at end 2015 estimated at 1.76 Gb; [Gb, Giga (Billion) barrels, refer also figure 06] and this development phase is now scheduled to start flowing in late 2019.

Sanctioned Developments in Figure 01 represents the total contributions from 7 sanctioned developments of discoveries now scheduled to start to flow between 2016 and 2019.

My forecast for 2016 is 1.50 Mb/d with crude oil from the NCS.

My forecast shown in figure 01 includes all sanctioned developments and not discoveries (refer also figure 08) and contingent resources in the fields. The forecast is subject to revisions as the reserve base becomes revised (as discoveries pass the commercial hurdles) which likely will fatten the tail of the presented forecast post 2020.

My forecast assumes some reserve growth, but does not include the effects from fields/discoveries being plugged and abandoned as these reach the end of their economic life.

Discoveries sanctioned for development and Johan Sverdrup (with an expected start up late 2019) is expected to slow down the decline in Norwegian crude oil extraction.

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Status of Norwegian Natural Gas at end of 2014 and Forecasts towards 2025

In this post I present actual Norwegian natural gas production, status on reserves, the development in discoveries and what this results for Norwegian Petroleum Directorate (NPD) and my expectations for the future delivery potential for Norwegian natural gas.

Norway, after Russia, has been and is the EU’s second biggest supplier of natural gas.

Included is also a brief look at developments in actual consumption and production of natural gas in the EU 28 (the 28 members of the European Union).

  • NPD revised down their band for future delivery potential by about 10 Gcm/a (Bcm/a) and moved the start of decline one year forward relative to their forecast last year.
  • I now expect the Norwegian delivery potential for natural gas relative to 2014/2015 to decline by more than 40% by 2025.
  • Europe will increasingly have to rely on natural gas imports from more distant sources and should by now have implemented policies for the role natural gas will have in its future energy mix.

This post is an update to my post in 2014 looking at the status as of end 2013.

Figure 1: The chart above shows development in natural gas exports from production installations on the Norwegian Continental Shelf (NCS) as reported by the Norwegian Petroleum Directorate (NPD) from 1996 to 2014 and with my forecast for delivery potential towards 2025. The chart also shows the NPD forecasts; green line upper projection, orange line lower projection. NPD’s central projection is in about the middle of the green and orange lines. The black dotted line is the forecast from the International Energy Agency’s World Energy Outlook 2012 (IEA WEO 2012). Numbers are believed to be gross exports from the production installations and thus not adjusted for “shrinkage” from Natural Gas Liquids (NGL) extraction, primarily at Kollsnes and Kårstø. The NGL extraction reduces total sales gas volumes with around 4% relative to what is exported from the producing installations. Numbers in Gcm, Giga cubic meters (Gcm = Bcm; Billion cubic meters)

Figure 1: The chart above shows development in natural gas exports from production installations on the Norwegian Continental Shelf (NCS) as reported by the Norwegian Petroleum Directorate (NPD) from 1996 to 2014 and with my forecast for delivery potential towards 2025.
The chart also shows the NPD forecasts; green line upper projection, orange line lower projection. NPD’s central projection is in about the middle of the green and orange lines.
The black dotted line is the forecast from the International Energy Agency’s World Energy Outlook 2012 (IEA WEO 2012).
Numbers are believed to be gross exports from the production installations and thus not adjusted for “shrinkage” from Natural Gas Liquids (NGL) extraction, primarily at Kollsnes and Kårstø. The NGL extraction reduces total sales gas volumes with around 4% relative to what is exported from the producing installations.
Numbers in Gcm, Giga cubic meters (Gcm = Bcm; Billion cubic meters)

My forecast  and NPD’s forecast at end 2014 are basically identical towards the end of this decade, but differs about the timing for the start of the decline and how steep this will become as from early next decade. My forecast is also tested versus the Reserves over Production (R/P) ratio as of end 2014, refer also figure 2.

At end 2014 the NPD projection of Norwegian natural gas supply potential towards 2025 was revised down.

NPD’s central projection is in about the middle of the green and orange lines. Note the span of uncertainties in the NPD’s forecast.

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Norwegian Crude Oil Reserves And Extraction per 2014

In this post I present actual Norwegian crude oil extraction and status on the development in discoveries and reserves and what this has now resulted in for expectations for future Norwegian crude oil extraction.

This post is also an update of an earlier post about Norwegian crude oil reserves and production per 2013.

Norwegian crude oil extraction peaked in 2001 at 3.12 Million barrels per day (Mb/d) and in 2014 it was 1.52 Mb/d.

The Norwegian Petroleum Directorate’s (NPD) recent forecast expects crude oil extraction from  the Norwegian Continental Shelf (NCS) will become around 1.49 Mb/d in 2015.

Figure 01: The chart shows the historical extraction (production) of crude oil (by discovery/field) for the Norwegian Continental Shelf (NCS) with data from the Norwegian Petroleum Directorate (NPD) for the years 1970 - 2014. The chart also includes a forecast for crude oil extraction from discoveries/fields towards 2040 based on reviews on individual fields, NPD’s estimates of remaining recoverable reserves, the development/forecast for the R/P ratio etc. as of end 2014. Further, the chart shows a forecast for total crude oil extraction from sanctioned discoveries/fields (green area, refer also figure 02) and expected contribution from Johan Sverdrup (blue area) [at end 2014 estimated at 2.22 Gb; [Gb, Giga  (Billion) barrels, refer also figure 05]  which is now scheduled to start flowing in late 2019.

Figure 01: The chart shows the historical extraction (production) of crude oil (by discovery/field) for the Norwegian Continental Shelf (NCS) with data from the Norwegian Petroleum Directorate (NPD) for the years 1970 – 2014. The chart also includes a forecast for crude oil extraction from discoveries/fields towards 2040 based on reviews on individual fields, NPD’s estimates of remaining recoverable reserves, the development/forecast for the R/P ratio etc. as of end 2014.
Further, the chart shows a forecast for total crude oil extraction from sanctioned discoveries/fields (green area, refer also figure 02) and expected contribution from Johan Sverdrup (blue area) [at end 2014 estimated at 2.22 Gb; [Gb, Giga (Billion) barrels, refer also figure 05] which is now scheduled to start flowing in late 2019.

“Sanctioned Developments” in Figure 01 represents the total contributions from 8 sanctioned developments of discoveries now scheduled to start to flow between 2015 and 2017.

My forecast for 2015 is 1.47 Mb/d with crude oil from the NCS.

My forecast shown in figure 01 includes all sanctioned developments and not discoveries (refer also figure 07) and contingent resources in the fields. The forecast is subject to revisions as the reserve base becomes revised (as discoveries pass the commercial hurdles) which likely will fatten the tail post 2020 of the presented forecast.

My forecast assumes some reserve growth, but does not include the effects from fields/discoveries being plugged and abandoned as these reach the end of their economic life.

Discoveries sanctioned for development and Johan Sverdrup (with an expected start up late 2019) is expected to slow down the decline in Norwegian crude oil extraction.

Read the rest of this entry »

World Crude Oil Production and the Oil Price

In April 2012 I published this post about World Crude Oil Production and the Oil Price (in Norwegian) which was an attempt to describe the developments in the sources of crude oils (including condensates), tranches of total life cycle costs (that is [CAPEX {inclusive returns} + OPEX] per barrel  of oil) and something about the drivers for the formation of the oil price.

Rereading the post and as time passed, I learnt more and therefore thought it appropriate to revisit and update the post as it in my opinion contains some topics from what I have observed, learned and discussed that have been given poor attention and appears poorly understood.

I will continue to pound the message that oil prices are also subject to the reality of;

  • “Demand is what the consumers can pay for!”

Figure 1: The chart above shows the developments in the oil price [Brent spot] and the time of central banks’ announcements/deployments of available tools to support the global financial markets which the economy heavily relies upon. The financial system is virtual and thus highly responsive. The chart suggests causation between FED policies and movements to the oil price.

Figure 1: The chart above shows the developments in the oil price [Brent spot] and the time of central banks’ announcements/deployments of available tools to support the global financial markets which the economy heavily relies upon. The financial system is virtual and thus highly responsive.
The chart suggests causation between FED policies and movements to the oil price.

The four big central banks, BoE, BoJ, ECB and the Fed expanded their balance sheets with $6 – 7 Trillion following the Lehman collapse in the fall of 2008. These liquidity injections are about to end.

Since 2008 most of the advanced economies’ credit expansions originated from the central banks, the lenders of last resort. Central banks are collateral constrained.

The consensus about the oil price collapse during the recent weeks is attributed to waning global demand and growth in  supplies.

All eyes are now on OPEC.

  • Any forecasts of oil (and gas) demand/supplies and oil price trajectories are NOT very helpful if they do not incorporate forecasts for changes to total global credit/debt, interest rates and developments to consumers’/societies’ affordability.

For more than a decade, I have carefully studied the forecasts (and been involved in numerous fruitful [private] discussions) from authoritative sources like the Energy Information Administration (EIA) and the International Energy Agency (IEA) including the annual outlooks from several of the major oil companies and I did NOT find that any of these takes into consideration changes to global credit/debt [growth/deleveraging], levels of total global credit/debt and interest rates.

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