Bud's Offshore Energy (BOE)

The combination of high production of oil and gas from a total of 94 fields, significant demand and high commodity prices led to a historically high level on the State’s revenues from petroleum.

Production in 2021 came to 102 million standard cubic metres of oil (642 million barrels) and 113 billion standard cubic metres of gas. This corresponds to about four million barrels of oil equivalent per day, a minor increase from the previous year.

NPD

Norway wisely eased the petroleum tax burden during the pandemic with favorable results.

The temporary change in the petroleum tax has most likely led to an increase in project activity. The projects would most likely have been carried out even without the tax package, but some of them would have been postponed.

NPD

An aspect of Norwegian offshore policy that is confusing to this outside observer is the emphasis on transmitting electric power from shore to offshore platforms (see quote below). In most cases, offshore platforms produce sufficient gas to support their power demands. Should platforms be powered from shore, gas that is not used for platform operations would presumably be marketed for consumption elsewhere or reinjected. If the gas is marketed and consumed elsewhere, there is essentially no net (global) CO2 emissions reduction benefit. Gas that is reinjected is wasted unless there is an enhanced oil recovery benefit. So it would seem that importing electric power from shore would only make sense if the net reduction in offshore gas consumption increased ultimate oil production (which could be viewed as undesirable if you take carbon management to the extreme).

While production remains high, CO₂ emissions are dropping. The most important reason for this is the use of power from shore. The objective is to cut emissions in half by 2030 compared with the level in 2005.

NPD

In a separate article, NPD notes that power from shore increases the cost of platform operations and will also lead to an increase in electricity prices in Norway. Given these considerations, the very small net global reduction in CO2 emissions seems costly.

Platform electrification no doubt helps Norway achieve domestic emission reduction commitments. However, from a global perspective, how important is it for a minor CO2 emitter like Norway to achieve further reductions? Also, isn’t it somewhat contradictory for a major oil and gas exporter to take such extreme measures to reduce the emissions associated with the production of these resources?

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