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Buoyant outlook for NCS

August 21, 2000, 13:00 CEST

More than NOK 1 000 billion is due to be spent by the oil industry on the Norwegian continental shelf (NCS) over the coming decade, according to Statoil calculations.

The group will account for almost half this amount, or roughly NOK 475 billion, chief executive Olav Fjell told a press conference in Stavanger today, 21 August.

Costs associated with operation and maintenance are set to account for a steadily growing proportion of total expenditure, he said.

Calculations by Statoil show that investment in new projects on the NCS over the next decade will total more than NOK 350 billion, with the group itself accounting for more than NOK 60 billion.

The group's estimates show that Norway's gross revenues from oil and gas sales over the next decade will total NOK 2 000-3 000 billion, much of which will fall to the government through the tax system.

Statoil intends to remain the leading industrial architect on the NCS, said Mr Fjell. That calls for the ability to develop and adopt new technology.

The group has demonstrated this on Åsgard - Norway's most complex offshore project. Active and successful efforts have also been pursued in developing a number of smaller fields.

Effective and profitable operation are crucial for value creation on the NCS, and Statoil has now positioned itself in the top rank of NCS operators on this criterion through long-term and systematic improvement efforts. This has been documented by new benchmarkings.

Creating a better division of interests in Norwegian offshore fields with the aid of the state's direct financial interest (SDFI) could contribute to a substantial increase in value creation, said Mr Fjell.

"Active use of SDFI interests would ease the work of realising this potential. However, as a responsible operator - regardless of the outcome of current discussions about the future of Statoil and the SDFI - we will do what we can to achieve this additional value."