“IT IS VERY IMPORTANT TO ENSURE THE OPEN GAS TRANSPORTATION -
Anita Utseth, Deputy Minister of Petroleum and Energy of Norway“
“I can say we have produced one-third of our resources so far and another one-third is being produced. Today Norway sits on 50% of all oil and gas reserves in Western Europe, and Norwegian gas supplies 15% of the EU’s demand. The Norwegian-Azerbaijani mutual relations are at the high level. Both the countries are oil&gas producers. Azerbaijan and Norway pay high attention to energy security issues. We expect the Caspian region, in particular Azerbaijan, to play a big part in oil&gas production in the nearest future”, said Anita Utseth, Deputy Minister of Petroleum and Energy of Norway, in her interview with Caspian Energy.
Caspian Energy (CE): How would you evaluate Norway’s present state of oil&gas reserves? How much gas is Norway supplying to the EU today?
Anita Utseth, Deputy Minister of Petroleum and Energy of Norway: The basic objective for Norway is to be a stable and predictable supplier of energy. This year we are going to produce nearly 90 billion m3 of natural gas. Last year we produced about 2.6 million barrels per day and with a domestic consumption of just over 200,000 barrels per day, we have long been one of the world’s major oil exporters.
As for oil and gas, our reserves today total nearly 80 billion barrels of oil equivalent. I can say we have produced one-third of our resources so far and another one-third is being produced. Today Norway sits on 50% of all oil and gas reserves in Western Europe.
When it comes to gas production, we produced 3.1 trillion ft3 (87 billion m3) of natural gas in 2006. With negligible amounts used domestically, we rank third among the world’s largest gas exporters. And we will soon by-pass Canada to second place, as our gas exports by early next decade will increase 50% to around 4.6 trillion ft3 (130 billion m3). This implies that exports from Norway accounts for or will account for nearly a third of natural gas consumption in countries such as France, Germany and Britain.
As to the second part of your question, I have to say Norwegian gas today supplies 15% of the EU’s demand.
CE: Nevertheless, it is well known that petroleum production in Norway is falling alongside the reserve estimation. How is Norway going to cope?
Anita Utseth: Our household gas production is actually increasing. What we have seen is a decrease in oil production, but we have a tremendous increase in gas production. Our resource basis is 80 billion barrels of oil equivalent.
In the period of 2007-2013 it is estimated that the investments will increase with more than NOK 130 billion - about USD 21 billion - compared to the forecast given in the state budget for 2007. In the coming four years existing fields will account for 70% of the investments.
Our geologists estimate that nearly a third of the petroleum resources are yet to be found on the Norwegian Continental Shelf. That is over 20 billion barrels of recoverable oil equivalent.
Unfortunately, by the end of the last millennium we saw a negative trend in the exploration activity on the Norwegian shelf – fewer exploration wells and fewer major discoveries.
Today it is necessary to intensify global supplies for the purposes of energy security. The diversification of hydrocarbons delivery from Norwegian shelf shall be considered. Statoil of Norway produces nearly 60 percent of shelf hydrocarbons in Norway, its total production is some 1.2mbd.
CE: What is your opinion about integration with the EU energy market?
Anita Utseth: Norway is fully integrated into the European market. We have all European legislation in place and the company sells gas directly from the Norwegian continental shelf to the customers in Europe.
CE: Some people say the EU countries are unwilling to integrate their energy companies with the pan-European energy system...
Anita Utseth: As the European Union says, there are still changes to be done in the downstream market. But the upstream market in Norway is liberalized. Beside that we are exporting more than 99% of our gas production in Norway.
CE: Is Norway planning to extend its participation in the Caspian region?
Anita Utseth: The Norwegian-Azerbaijani mutual relations are at the high level. Both the countries are oil&gas producers. Azerbaijan and Norway pay high attention to energy security issues.
Norway started exporting its oil and gas in 1970s. Azerbaijan has been producing petroleum for already 120 years.
Since 1994 the governments of Norway and Azerbaijan have cooperated in ol&gas sector. Since 1994 the governments of Norway and Azerbaijan have cooperated in ol&gas sector. Norwegian companies leading commercial operations in Azerbaijan played an important part in the development of the country’s oil&gas sector and they now keep seeking opportunities to broaden their participation in the Caspian region.
In general, we expect the Caspian region, in particular Azerbaijan, be playing the big part in oil&gas production.
The petroleum epoch of the Caspian has a great future and Baku-Tbilisi-Ceyhan is a new route underlining the importance of established transit way.
Norway also recognizes Azerbaijan’s leading role in implementation of the Extraction Industry Transparency Initiative (EITI). In general, the work for implementation of EITI that Azerbaijan is performing is quite significant at the global scale.
CE: Is Norway going to promote the talks on Aze4rbaijani gas transit through Turkey?
Anita Utseth: Norway takes part in Baku-Tbilisi-Ceyhan oil pipeline project (BTC). Norwegian government welcomes the oil and gas transportation using this route to global and European markets, including those concerning the reduction of traffic through Bosporus and Dardanelles straits, which is quite important from environmental point of view.
Certainly, it is very important to ensure an open transportation of gas.
CE: Could Azeri gas compete with Norwegian or gas of other manufacturers?
Anita Utseth: No, as the European gas market is enough for all.
CE: How would you estimate Statoil’s marketing of Azerbaijani gas produced at Shah Deniz?
Anita Utseth: Statoil is a big player in the European gas market. The petroleum and natural gas marketing plays a big role for investments and commercial operations. The company has a huge experience and knowledge of gas market.
CE: As far as we know the government’s stake in Statoil is quite high...
Anita Utseth: The efficient state planning and regulation in the oil&gas industry are the most important factors that enabled Norway to become one of the world’s richest countries. Norwegian oil&gas industry is highly profitable and its petroleum companies are very active in the world market. The significant expedience and huge investments in this sector of economy stimulate the constant production rise.
Today the government has a stock in Statoil. However, the company is managed on a commercial basis.
CE: Statoil quit Kashagan project. Does the company regret it?
Anita Utseth: Statoil is a commercial entity listed on the stock exchange. I think you should address this question to Statoil itself.
But I would like to add that Statoil is looking for future opportunities in Kazakhstan and Azerbaijan.
Thank you for the interview.