The record gas sales primarily reflected reduced imports of liquefied natural gas (LNG) to Europe, which gave room for higher exports from Norway.

Income after financial items for the SDFI totalled NOK 110.4 billion for the first nine months, up by 16.8 per cent from the corresponding period of 2011. Oil and gas production averaged 1 093 000 barrels of oil equivalent per day (boe/d), an 11 per cent increase from the first nine months of last year. Gas production was up by 21 per cent, while output of oil and natural gas liquids (NGL) declined by just 0.8 per cent.

Kjell Pedersen, chief executive of Petoro, is very satisfied with results so far this year. “The state’s direct investments in the oil and gas industry continue to show results which any company might envy. I believe it’ll be important that this is borne in mind by those responsible for awarding new licences over the next few years. It’s also very positive that oil production has remained at the same level as 2011. The challenge for the future will be to ensure that this continues.”

Operating income for the third quarter came to NOK 30 billion, compared with NOK 29.5 billion in the same period of 2011. Net cash flow was NOK 30.6 billion, up by four per cent from the third quarter of last year. Total oil and gas production for the third quarter averaged 958 000 barrels of oil equivalent per day (boe/d), compared with 879 000 for the same period of 2011.

Thousand producers needed
Work done by Petoro during the third quarter shows that 1 000 new production wells need to be drilled in fields with a direct state interest in order to get out their reserves and improve recovery. “This is a substantially larger number of producers than we’ve previously imagined to be necessary,” says Pedersen. “But an even more important consideration for achieving such a number of wells within the estimated producing life of the fields is that the drilling rate must radically improve – far beyond the level possible with existing drilling facilities on the fields.”

He notes that Petoro continued its work on solutions to this challenge during the third quarter. One example is a further concretisation of work on a wellhead platform as part of the further development of Snorre. Such installations would allow the pace of drilling to be sharply increased while making it possible to target smaller volumes of oil. That would also improve recovery.

An example of the potential gain offered by a faster pace of drilling is offered by calculations Petoro has carried out for a large mature field. These show that increasing the annual drilling rate from two to four production wells could yield up to 140 million boe over the next 30 years. “The potential for gain is present, and it’s been realised by others – such as ConocoPhillips, BP and their partners on Ekofisk and Valhall respectively,” notes Pedersen.

“It’s opportunities and challenges of the kind described above that we’d have liked to devote even more resources to – over and above what we see to be possible on the basis of next year’s proposed appropriation in the government budget.”


Stavanger, October 2012
The board of directors of Petoro AS



Contact:
Sveinung Sletten
Head of communications, Petoro AS
Tel: +47 95 07 55 54
E-mail: sveinung.sletten@petoro.no