Norway to Invest in O&G Industry Development
- Business & Finance
In the National Budget 2014, the Government is proposing continued investment in increased oil recovery and the development of the petroleum industry in northern Norway.
Accordingly, the grants to Petoro and the Norwegian Petroleum Directorate will be increased by NOK 6 million and NOK 4 million, respectively, to strengthen investment in increased recovery. Support will also be given to two research centres; one focusing on increased recovery and one concentrating on petroleum activity in the Arctic.
The oil and gas fields on the Norwegian continental shelf offer significant potential for increased recovery, and constitute substantial assets. At current oil prices, an increase in the recovery factor of just one per cent would generate gross revenue of more than NOK 350 billion.
“The Government is proposing two important measures in the budget to help realise the value potential of increased recovery on the Norwegian continental shelf. First, we are strengthening the supervisory authorities by increasing the grants to the Norwegian Petroleum Directorate and Petoro, to enable these bodies to promote increased recovery from operational fields even more strongly. Second, we have established a new research centre for increased recovery at the University of Stavanger, which will become fully operational in 2014. The centre will cooperate with the industry in the development of new methods and new knowledge to increase recovery,” says Minister of Petroleum and Energy Ola Borten Moe.
In addition, it was decided earlier this autumn that a new research centre focusing on increased recovery would be located at the University of Stavanger. The centre will develop knowledge and technology to raise the recovery factor from the level applied in current operational plans for the fields. The Ministry of Petroleum and Energy will provide support of NOK 10 million a year during a five-year period. The centre will also receive industry funding.
At the end of May, it was decided that a new research and knowledge centre for petroleum activities in the Arctic should be established in Tromsø. Researchers at the centre will be tasked with helping to solve challenges involved in petroleum activities in Arctic regions. Research will be conducted in collaboration with other research institutions in Norway. The Ministry of Petroleum and Energy and the Ministry of Foreign Affairs will co-fund the centre, which will also receive support from the industry.
“The purpose of the centre is to strengthen the research community and boost recruitment to the petroleum sector in northern Norway. The centre will provide us with greater insights into Norway’s resource base and develop methods for more environmentally friendly exploration in the Arctic,” says Minister of Petroleum and Energy Ola Borten Moe.
In the white paper entitled “An industry for the future – Norway’s petroleum activities” (Meld. St. 28 (2010–2011)), the Government stated that the primary objective of Norwegian petroleum policy is to facilitate profitable production of oil and gas in a long-term perspective. Important aspects of this objective are to increase recovery from the fields on the Norwegian continental shelf that are already in production, strengthen research in this field, and facilitate responsible utilisation of petroleum resources in northern Norway. This is also identified as a priority area in the white paper on the High North (Meld. St.7 (2011-2012)).
Press Release, October 15, 2013