Norway’s oil industry faces thinner margins as smaller new discoveries boost per-barrel development costs, Statistics Norway (SSB) said in a report on Tuesday.
“In the long term, it appears that the downturn that began in 2013, when output and prices fell, may have marked the turning point for Norway’s oil industry,” SSB said.
“Resources on the continental shelf are becoming more and more marginal it appears. New fields contain much less oil and gas than in the past,” it said.
The giant Johan Sverdrup field, discovered a decade ago, came on stream in October. It has given a much-needed boost to investment and the cash flow of oil firms, but this is proving the be the exception rather than the rule.
“In the 1970s and ‘80s, discoveries of this magnitude were made almost on an annual basis,” the SSB said.
In the Arctic Barents Sea, which went largely unexplored while oil firms drilled in the North Sea and the Norwegian Sea, results of the last 20 years have been disappointing, the agency noted.
“More and more oil firms are pulling out (from Barents Sea exploration) despite the government’s refunding costs for dry wells …international oil firms have better places to explore for oil and gas,” the SSB said.