The people and government of Norway are following our exploration activities with considerable interest, since some of the most exciting prospects remaining on the Norwegian continental shelf may well lie here in the Barents Sea—and with them, the promise of greater wealth and welfare for coming generations.
At the same time, many of us are working for a transition to a less carbon-intensive society. Balancing these apparently opposing interests is a challenge that we believe can, and should be, resolved.
Energy is at the root of all aspects of modern society: heating, transportation, housing, lighting, food, health, education, resources for industry. In other words, the world needs energy.
Our aim is therefore to convert natural resources into energy for people and progress for society—and in the next 20–30 years, hydrocarbons will be a necessary part of the solution, alongside increased renewable energy investments.
Irrespective of which scenario you choose to believe in, there will be a significant gap between supply and demand of energy in 2040. And at this point, projections point to demand being higher than can be met by planned and existing fields, and production is dwindling.
That’s why it is essential to continue to explore for more oil—and when doing so, it is an advantage to do so in countries that are competitive on CO2 emissions, that are politically stable suppliers or energy, and that have strict environmental and safety requirements.
In Norway, the petroleum industry believes that more than 50 per cent of the undiscovered resources on the Norwegian continental shelf could be in the Barents Sea—in other words, that its future lies in the north. We have developed new field development technology that will enable us to develop profitable and competitive oil fields in the north, given that we find sufficient volumes.
Ripple effects from north to south
For many years, Equinor has been a guarantor of activity and value creation in Northern Norway. We have explored the Barents Sea since the 1980s and have participated in more than 100 of the 150 exploration wells drilled so far in the Barents Sea. We have a clear, long-term ambition to maintain current levels of activity on the Norwegian continental shelf up to and beyond 2030.
And if we make further discoveries offshore in the Barents Sea, there will undoubtedly be positive economic ripple effects onshore. For example, the development of Phase 1 of the Johan Sverdrup field will create around 51,000 jobs (FTE) in Norway alone, while the Johan Castberg field in the Barents Sea could create 23,000 jobs (FTE) in the project phase.
Today, Norway faces making dramatic adjustments to meet higher pension costs and other welfare expenditure, and needs all the income it can get from oil and gas. Even with an oil price that is half of what it was a few years ago, oil production still provides approximately one sixth of Norway’s national budget. In 2015, the Norwegian state received NOK 62 billion in tax revenues from Statoil, in addition to NOK 15 billion in dividends.
In total, the petroleum industry contributes some 68.7 % of the total taxes in Norway, which in 2015 totalled NOK 245.7 billion.
If we look at our industry in a wider perspective, it provides revenue to the Norwegian state, which in turn distributes this wealth between all the counties in Norway. This then helps to improve welfare, build schools, roads and hospitals, regardless of where the oil activity takes place on the Norwegian continental shelf.