Jan. 10 (UPI) -- Total production from Norway, one of the main oil and gas producers in Europe, should hold steady this year, but expect some marginal headwinds, an analysis finds.
Apart from Russia, Norway is the top oil and natural gas supplier for the European economy, designating nearly all of its offshore production to the export market. The government reported preliminary figures for November, the last full month for which it published data, at 1.46 million barrels of oil, 316,000 barrels of natural gas liquid and 31,000 barrels of condensate, an ultra-light form oil.
Analysis from Wood Mackenzie said full-year 2018 production should be about on par with the recent average, though Norway's government said its November estimates were lower than expected because of the closure of the Goliat field in the Barents Sea, operated by Italian energy company Eni and shut down briefly on safety concerns.
The government said investment commitments for projects like the Johan Sverdrup field in the North Sea, which will eventually represent about 25 percent of total Norwegian production, point to clear signs of growth for the petroleum industry.
Wood Mackenzie, in an emailed reported, estimated total investments for 2018 at around $15 billion, but overall spending commitments could be slightly lower this year. That improves, however, in 2019 when final investment decisions for planned projects like Johan Sverdrup start to kick in. But the new report, published Wednesday, said "operators will still be looking to optimize developments and rationalize spend."
Norwegian energy major Statoil, which is co-owned by the government, said an estimated $1 billion in contracts will be awarded now that a plan for enhancing the 200 million-barrel Snorre field in the North Sea is on the table. The government estimated the total investment for the Snorre enhancement at $2.3 billion.
Merger and acquisition activity in the Norwegian energy sector, Wood Mackenzie said, could drop off this year and even Statoil could shed some assets, though "there won't be any fire sales."
For exploration and production, known as the upstream sector, expect to see 35 new wells tapped in Norwegian waters, but the Barents Sea is the clear focal point.
Lundin Petroleum, in which Statoil has an interest, said Wednesday an exploration well in the southern waters of the Barents Sea, however, came up dry.
Nevertheless, Neivan Boroujerdi, a senior research analyst at Wood Mackenzie, said last year was a good one for Norway in general.
"And while the hype surrounding the Barents exploration campaign failed to deliver, this hasn't dampened appetites for 2018," he said in a statement.