Norwegian Draft Budget Highlights Higher Oil and Gas Production

Norway’s production of oil liquids is expected to rise 5% in 2024 y/y and gas by 1.7% according to the governments draft budget out Friday.

• Norway is Europe’s biggest gas supplier after Russian flows were largely curtailed by the explosion of the Nord Stream pipeline last year.
• Norway meets about 30% of European gas needs. Norway has faced increased calls from its European partners to increase oil and gas production to try and help with European energy security measure post Russia fallout.
• Norway’s Equinor has committed to keeping production strong at its huge Johan Sverdrup field. Its Phase 3 project will allow it to keep production at current high levels of around 755,000 bpd.
• Sverdrup, which first came on stream in 2019, now accounts for around a quarter of all oil produced in the otherwise declining North Sea region. The crude, which is relatively heavy and sulfurous, has met with exceptional demand due to sanctions on Russia and its Urals crude as well as Saudi production cuts.
• Platts reported record Johan Sverdrup premiums to Dated Brent at $3.94/b Oct. 4 due to the increased demand for the more distillate prone grade.