INTERVIEW WITH ERIK MEANS
Upstream is an international online newspaper, specializing in the oil and gas industry. Their focus lies in the business, policy, trends and the key players. Erik Means is the Editor-in-chief and has family roots in Norway and America. In the following interview he gives us a look and overview of the issues that will be discussed further in the documentary.
The Norwegian oil production started in the 1970's, and in the 1980's and 1990's it really took of. Today the oil production is much lower but the gas production has gone up. The oil price has always been up and down. In 2008, when the Lehman Brothers went bankroupt, it took a huge leap down. After a while it slowly stated to climb upwards. But in the fall of 2014 it sunk down very low again. The reason for this was that the production in the U.S. had picked up, due to a new technology that made it possible to get oil and gas out of shale structures that weren't possible before. Because the U.S. production was high, the oil storage went up. This led to a situation where supply was much higher then demand, and therefore the oil price dropped.
Norway is a very high-cost environment for oil production. The Norwegian offshore drilling is located in a difficult environment, being harder to reach. The bad accessibility makes it more expensive to produce. And when the oil price is low and the expenses are high, it is bad for the business. Looking at predictions, Norway's older fields will go into decline. The oil production needs to be replaced in order to satisfy the World's demand.
With the oil price being low, Saudi Arabia expressed that they didn't wanted to cut their quotas, to help boost the oil price. The Saudis hoped to be able to squeeze U.S. shale production out of the market. Many such shale fields did end up having to shut production, but thanks to new onshore technology and lower expenses, shale output from the most productive basins, like Permian basin in Texas, could keep afloat even with oil prices down around $45 per barrel.
Large portions of the waters off the coast of Northern Norway are protected areas where oil exploration activities are not allowed by the government. This for sure bugs the industry since there is predicted to be a large squantity of oil in the ground. However locals have recently voted against allowing oil companies to drill in the area. This will probably not influence the lincences that have already been awarded elsewhere in the Barents Sea. But Greenpeace will for sure try to prevent the oil companies from opening up new fields.
Go to "Greenpeace" to hear the interview with Norwegian leader Truls Gulowsen.
Norway is a very high-cost environment for oil production. The Norwegian offshore drilling is located in a difficult environment, being harder to reach. The bad accessibility makes it more expensive to produce. And when the oil price is low and the expenses are high, it is bad for the business. Looking at predictions, Norway's older fields will go into decline. The oil production needs to be replaced in order to satisfy the World's demand.
With the oil price being low, Saudi Arabia expressed that they didn't wanted to cut their quotas, to help boost the oil price. The Saudis hoped to be able to squeeze U.S. shale production out of the market. Many such shale fields did end up having to shut production, but thanks to new onshore technology and lower expenses, shale output from the most productive basins, like Permian basin in Texas, could keep afloat even with oil prices down around $45 per barrel.
Large portions of the waters off the coast of Northern Norway are protected areas where oil exploration activities are not allowed by the government. This for sure bugs the industry since there is predicted to be a large squantity of oil in the ground. However locals have recently voted against allowing oil companies to drill in the area. This will probably not influence the lincences that have already been awarded elsewhere in the Barents Sea. But Greenpeace will for sure try to prevent the oil companies from opening up new fields.
Go to "Greenpeace" to hear the interview with Norwegian leader Truls Gulowsen.
The graph below shows how the Norwegian oil production has developed since 1970, with the discovery of oil at Ekofisk, all the way to the present and further until 2020.
Data retrieved from: https://www.ssb.no/en/
We see in the graph, that the production peaks in 2002, and afterwards it drops. Looking at the predictions it seems to be that the production will be steady without dramatic drops or peaks. Erik Means described the same tendency, telling that smaller oil fields will be drying up, but a new discovery in the North might keep the production uplevel, if not rise. Although the amount of production will depend on the development of the oil price.