Sokkeldirektoratet

Cutting oil production

klima-1.jpg

4/30/2020 The Norwegian authorities’ decision to cut oil production starting in June is being made in an effort to contribute toward more rapid stabilisation of the oil market than the market mechanism alone could ensure.

A more rapid stabilisation of the oil market will be important out of consideration for sound resource management and the Norwegian economy at large.

In a statement, the Minister of Petroleum and Energy Tina Bru said that, “We will cut Norwegian oil production by 250,000 barrels per day in June, and by 134,000 barrels per day in the second half of the year. The start of production on multiple fields will also be postponed to 2021. Overall Norwegian production in December 2020 will amount to 300,000 barrels a day lower than the companies had planned. This regulation will cease at the end of the year.”

Read the press release from the Ministry of Petroleum and Energy

The Norwegian Petroleum Directorate has assisted the Ministry of Petroleum and Energy in its work on the production regulation.

The oil companies will be consulted before revised production permits are issued.

This cut is based on a reference production of 1,859,000 barrels of oil per day. A cut of 250,000 barrels a day in June 2020 thus yields an upper limit for oil production on the Norwegian shelf of 1,609,000 barrels a day in June.

A cut of 134,000 barrels a day in the second half of 2020 will yield an upper limit for average oil production from the Norwegian shelf during the second half-year of 1,725,000 barrels a day.

The cut will be distributed across individual fields and will be carried out by issuing revised production permits.

The most recent projections from the International Energy Agency (IEA) from mid-April indicate a drop in the demand for oil totalling approx. 23 per cent (23 million bbls/day) in the second quarter. This major, sudden and temporary drop in oil consumption in the 2nd quarter constitutes an extraordinary event in the oil market.

As a consequence of the market situation, the oil price has dropped by about 70 per cent since the start of 2020.

The production restriction will be implemented by the Ministry of Petroleum and Energy issuing a revised production permit for the month of June and the period from 1 July 2020 through 31 December 2020.

These cuts apply for Norwegian oil production. Some fields are therefore exempt from the regulation. This includes gas and condensate fields, transboundary fields and mature fields that are in a late tail phase.

 

Contact
Bjørn Rasen

Tel: +47 51 87 60 00

Updated: 4/30/2020

Latest news

Full house to hear about new technology on the NCS
6/6/2025 "Technology is one of the tools that can help generate additional values from the Norwegian continental shelf (NCS). At Technology Day new technology from different suppliers are presented."
New interactive map of deep sea data
6/5/2025 Today, the Norwegian Offshore Directorate is launching an interactive map, Deep Sea Surveys.
New Director of Offshore development and technology
6/5/2025 Producing the resources on the Norwegian continental shelf (NCS) so they generate the greatest possible values for society is an important driving force for the Norwegian Offshore Directorate's new director.
Proved suitable properties for CO2 injection and storage (9/6-1)
6/2/2025 A wildcat well drilled by Harbour Energy Norge and licensees in the “Havstjerne” storage project confirmed a reservoir that is suitable for injection and storage of carbon dioxide (CO2).
Oil discovery and dry well in the North Sea (31/4-A-23 F and 31/4-A-23 G)
5/28/2025 OKEA and the licensees in production licence 055 have discovered oil along the eastern flank of the Brage field.
Drilling permit for wellbore 35/11-31 S
5/23/2025 The Norwegian Offshore Directorate has granted Equinor Energy AS drilling permit for wellbore 35/11-31 S in production licence 090.
Drilling permit for wellbore 15/5-8 S and 15/5-8 A
5/22/2025 The Norwegian Offshore Directorate has granted Equinor Energy AS drilling permit for wellbore 15/5-8 S and 15/5-8 A in production licence 1140.
Production figures April 2025
5/20/2025 Preliminary production figures for April 2025 show an average daily production of 2 030 000 barrels of oil, NGL and condensate.
Oil discovery in the Norwegian Sea (6507/5-13 S and 6507/5-13 A)
5/20/2025 Aker BP ASA and its partners have made an oil discovery in the so-called E prospect near the Skarv field.
Drilling permit for wellbore 6406/11-2 S
5/19/2025 The Norwegian Offshore Directorate has granted Vår Energi ASA drilling permit for wellbore 6406/11-2 S in production licence 586.