STAVANGER, Norway, Jan. 12 (UPI) -- Even though the sector remains resilient, a Norwegian energy director said there will be cost reductions for development that will pay off in the future.
Norway is among the leading oil and natural gas suppliers to the European economy apart from Russia. Preliminary data for November, the last full month for which data area available, show an average production of 2.15 million barrels of oil, natural gas liquid and an ultra-light product called condensate, which is about 2 percent higher than figures from October.
Bente Nyland, the director general of the Norwegian Petroleum Directorate, said oil and gas production remained high and companies have adjusted well to a sea change in the energy sector brought on by lower crude oil prices. Cost reductions for some developments of as much as 50 percent, meanwhile, mean companies will remain profitable provided the industry shows a degree of patience.
"We must prevent the focus on short-term profits from coming at the expense of long-term value creation for society," she said in a statement.
Investments in offshore operations last year were around $15.5 billion, nearly $6 billion less than peaks in 2013 and 2014, when oil was priced about 50 percent higher than in today's market. Through 2017, Nyland said investments are likely to remain under pressure, but recover from there.
In the exploration and production side, the NPD recorded 18 discoveries total, one more than in 2015, and most of those were made in the Norwegian waters of the North Sea.
"Many of the discoveries are small, but most are located near existing infrastructure," the director general said. "This means that they can quickly become profitable developments if they are tied in to operational fields and facilities."
Norway's output expands before the end of the decade with the startup of operations at the Johan Sverdrup oil field. More than $5.7 billion worth of development contracts have been awarded so far for a field that should account for up to 25 percent of total Norwegian petroleum production once at peak capacity.