Norway is set to boost its petroleum output by more than 9% by 2024 buoyed by a jump in investment in the country’s biggest export sector, data from the Norwegian Petroleum Directorate (NPD) showed on Thursday.
Norway expects oil companies to submit “dozens” of new investment plans this year, up from eight in 2021, as they take advantage of tax incentives introduced by parliament.
Petroleum output is expected to rise to 4.33 million barrels of oil equivalent in 2024, a rise of 9.1% from the preliminary 2021 reading of 3.97 million barrels, NPD forecasts showed.
Western Europe’s largest oil and gas producer, Norway globally accounts for about 2% of crude oil and 3% of natural gas output.
It is also Europe’s second largest pipeline gas supplier after Russia, accounting for up to a quarter of the European Union’s demand.
A surge in global gas prices has pushed Norway’s petroleum income to record levels in recent months, and the country continues to drill for new reserves here, betting demand will remain solid for decades to come.
The NPD said expected investment in the sector would “contribute to continued high and profitable production towards 2030, at which point the current plans show that production will decline”.
“The extent and speed of this decline will depend, among other things, on how much additional oil and gas the companies will discover in the years to come,” it added.
Environmental groups have protested the plans, arguing that Norway should end exploration and set a date for when oil and gas output should stop altogether.
A broad majority in parliament has rejected such proposals however, arguing that the cash flow from oil and gas is essential and that it can help fund a transition to greener energy.
Oil investment, excluding exploration, is expected to rise to 165 billion crowns in 2025 from 131 billion in 2022, the NPD said.
Oil companies are expected to drill between 30 and 40 exploration wells in 2022, compared to 40 wells that were completed last year, the regulator said.
Most of the wells are expected to be drilled around producing fields or existing infrastructure to ensure that any discoveries can be developed quickly and at a lower cost.
Norway’s new centre-left minority government said it would continue handing out new exploration licences, but it would focus on mature areas.