The company delivered a cash flow of NOK 57 billion in the fourth quarter, compared with 126 billion in the same quarter in 2022. The substantial difference was mainly caused by lower gas prices.

The portfolio Petoro manages consists of 43 producing fields, and in 2023, gas accounted for about two-thirds of overall production.

Good and stable operations
The volume of gas sold was seven per cent lower in 2023 than the year before due to turnarounds and temporary shutdowns on certain fields. At the same time, oil production declined somewhat from the previous year. However, the giant Johan Sverdrup provided a solid contribution to the year's production, illustrated by the production record set in May of 755,000 barrels of oil per day.

"In spite of lower gas sales and the achieved gas price being cut in half from the year before, we're very satisfied with the operation of the fields in our portfolio. Ensuring that the installations are well maintained is a necessary prerequisite for reliable deliveries from Norway to Europe," says Kristin Kragseth, President and CEO of Petoro.

Norwegian gas is important for Europe today and in the future
The EU's strategy to achieve climate neutrality in 2050 points out that there will still be a need for oil and gas imports to secure the energy supply, and that this needs to come from stable countries with secure deliveries. Norway currently supplies about 30 per cent of Europe’s gas consumption.

"Today, Norwegian natural gas is crucial for Europe’s energy security, and we believe that this will continue to be the case on the road toward a climate-neutral continent in 2050. There will be a demand for the gas in both direct applications, and eventually also as a decarbonised product in the transition to new low-carbon value chains. In order for Norway to continue playing such an important role, the exploration activity must be maintained," says Kragseth.

Mature fields and realising deferred projects
Petoro works closely with operators and licence partners to develop new profitable production with the lowest possible emissions. According to Statistics Norway, this year's planned investments in the oil and gas sector amount to NOK 244 billion. These are the highest investment figures ever.

"Activity on the Norwegian shelf will remain high over the next few years, and this year, Petoro is planning to invest about NOK 30 billion. Our strategy is both to help create additional investment opportunities on mature fields, in addition to finding good area solutions for multiple licences in the portfolio. And to accomplish this with the lowest possible emissions. It's been challenging to realise the two major Linnorm and Wisting projects, but smart solutions and hard work lead us to believe that these projects can provide good profitability and that we can find good environmental solutions," says Kragseth.

Climate targets can be reached with power from shore
Petoro aims to reach a 55% emission reduction from SDFI production by 2030, and so far, it has adopted measures bringing us close to a 30% reduction. Work is under way to identify sufficient new measures in the portfolio to fulfil this target. This is a very challenging project, and both the largest and most important measures involve electrification with power from shore. Solid work is being done to make these measures the best they can be in the context of both cost and efficiency, thus ensuring that necessary decisions are made.

"Access to power from shore is currently under pressure, and industry leaders have partnered with the authorities in an important effort to implement systems that provide the best possible solution for the power system, the industry and the environment. All of the choices we make have consequences," says Kragseth.

HSE results
There were a total of 18 serious incidents in the SDFI portfolio in 2023. This yields a serious incident frequency of 0.56. This represents a slight worsening from 0.54 in 2022. Falling objects continue to dominate the range of incidents. The personal injury frequency was 4.11, which is about the same level as in 2022. Petoro always puts safety first, and this approach is clearly communicated through the company's expectations for HSE management and HSE culture in the licences.
 
"The financial results would never have been possible without the comprehensive, long-term safety efforts on the Norwegian shelf over several decades," says Kragseth.
 
Financial results
Net cash flow to the state from the SDFI at year-end amounted to NOK 277 billion, 251 billion lower than the previous year. The cash flow was mainly affected by a decline in oil and gas prices from the extraordinary levels of the year before, as well as lower gas sales. The decline was partly offset by increased cash flow as a result of lower costs associated with third-party gas purchases and a reduction in working capital. In spite of the significant reduction compared with 2022, the cash flow for the year is still the second-highest in Petoro's history.

Total production reached 994 thousand barrels of oil equivalent per day (kboed), a reduction of 50 kboed compared with the previous year.

Gas production amounted to 102 million standard cubic metres (mill. scm) per day, a reduction of seven per cent compared with the year before. The decline was primarily caused by a turnaround on Troll, as well as the temporary shutdown of fields tied back to the process plant at Nyhamna. The reduction was partly offset by production from Snøhvit, which was shut down during the first half of 2022, and Dvalin, which came on stream in 2023.

The average realised gas price was NOK 5.76, compared with NOK 11.95 per scm the previous year. The reason for the lower gas prices is complex, but this was mainly caused by historically high LNG imports and filling up inventories in Europe, combined with lower demand.

Liquids production amounted to 354 kboed, a reduction of 5 kboed compared with the previous year. The decline in liquids production was primarily caused by natural production decline on several mature fields and a turnaround on Troll C, partly offset by increased production from Johan Sverdrup phase 2.
 
The average realised oil price was USD 83, compared with USD 104 per barrel the previous year. However, the reduction measured in Norwegian kroner was somewhat offset by a weakened NOK exchange rate, leading to an achieved oil price of NOK 876, compared with NOK 988 per barrel the year before. The oil price reduction was caused by lower demand growth than expected due to rising interest rates, lower economic growth and a fear of recession in several parts of the world. This effect was offset by increased geopolitical unrest and persistent cuts from OPEC+.
 
Please see the annual report for additional details
 
Press contact
Head of Communications Ørjan Heradstveit
Telephone +47 917 78 161