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Norway Cuts 2019 Oil Output Forecast to Lowest in 30 Years

Energy

Norway’s oil regulator reduced its forecast for production this year, predicting crude output could drop to the lowest in three decades before recovering in 2020.

  • Oil output of 82.2 million cubic meters, or 1.42 million barrels a day, would be the lowest since 1988. The forecast compares to actual production of 86.2 million last year, and is down from an earlier estimate of 87.2 million.

Key Insights

  • NPD says oil output was affected by new developments becoming more complex than anticipated and that fewer than expected wells have been drilled. Director General Bente Nyland added in an interview that delays and issues on new projects in 2018 would continue to affect output this year, forcing a reduction in the production forecast.
  • The NPD expects oil companies to drill 53 exploration wells offshore Norway in 2019, unchanged from last year, as the industry recovers from a recent downturn.
  • Investments in the offshore industry are set to rise 13 percent in 2019 to more than 140 billion kroner, excluding exploration.
  • The forecasts confirm that Norway’s oil industry is in full recovery mode, thanks to higher commodity prices but also drastic cost cuts that have made more projects profitable, even considering the recent relapse in crude prices. Still, the NPD again warned that the industry faces a slowdown toward the middle of the next decade due to a lack of new, big projects.

Signing of US – Norway Bilateral Maritime Arrangement

Government, Politics

January 9th 2019, the United States and Government of Norway signed an Arrangement which advances maritime threat response collaboration between the two nations. At a ceremony, hosted by the White House National Security Council, the Arrangement was signed by the Norwegian Defense Attaché to the US Rear Admiral Ole M. Sandquist and the Director of the U.S. Global Maritime Operational Threat Response Coordination Center, Scott Genovese.

The Arrangement provides Norway and the United States the ability to fully coordinate on emerging maritime threats affecting both nations.

The innovative Arrangement between the national level operations and coordination centers of the United States and Norway will improve the response to maritime terrorism, piracy, drug and human trafficking, maritime cyber attacks, public health threats, marine pollution, and related wide ranging Arctic challenges.

The signing of the Arrangement is important as it complements and reinforces the long-standing cooperation between our nations.Ministry of Defence

NACC chapter opens in Los Angeles

Trade

In Field of Dreams, James Earl Jones tells a broke farmer if he builds a baseball diamond, “people will come.” The next scene is cars lined up to see baseball played in an Iowa cornfield. That’s Hollywood.

Building Norwegian American Chamber of Commerce Los Angeles will not follow a Hollywood script. President Erik Steigen and the board know that. On Aug. 2, NACC Los Angeles Chapter, Inc. was incorporated in the State of California. On Sept. 20, the NACC Board of Directors voted unanimously on affiliation. LA becomes the ninth chapter and first since Philadelphia in 2013.

“We are starting from scratch,” said Steigen. “We didn’t get any funding to start up this chapter. None of us are getting paid. We literally just started our membership drive. We focused on getting the infrastructures in place: social media accounts, website, a newsletter, bringing on board sponsors. To date, we’ve brought on board three sponsors, helping us establish some basic funding for activities, startup costs, and ongoing expenses. We hope to be able to generate some enthusiasm.”

“The NACC headquarters in New York joins the other NACC chapters in welcoming the NACC Los Angeles Chapter,” says NACC President Cameron Beard. “We are very pleased with the new chapter’s activities to date. Erik Steigen and his group are doing a great job in reaching out to the increasingly large and diverse community of Norwegian and Norwegian-American businesses in Southern California. We will continue to support them as they move forward with this exciting new venture.”

The sponsors are Pacific Western Bank, Manatt, Phelps & Phillips, LLP, law firm, and R.D. Olson Development.

The task is additionally ambitious because LA is the only chapter in the Golden State.

“Because we are the only one in the state, we figured we should have an outlook that goes beyond Los Angeles,” Steigen said. “For practical purposes, we are concentrating on the greater Los Angeles area and Southern California, from Santa Barbara down to San Diego.

“There are a lot of other Norwegian institutions in San Francisco: the consul general, the Nordic Innovation House, Innovation Norway. Not down here. We’re the only one in terms of Norwegian anyway. That also gives us some advantages. We’ve already seen a collaboration with the consulate and Innovation Norway. When they get contacted by Norwegian businesses and organizations that want to come to LA, they are telling them to contact me.”

Steigen is CEO of USA Media Rights, Inc., and is joined on the board by Asbjørn Egir, adjunct faculty, College of Business Administration, California State Polytechnic University, Pomona; Dana Michels Gabrielsen, senior manager, contracts, at Service Titan; Audun Poulsen, general manager, Courtyard by Marriott Irvine Spectrum (the top Courtyard in the world), and Erik Rolland, dean and professor, College of Business Administration, California State Polytechnic University, Pomona.

While Los Angeles being the entertainment capital of the world attracts Norwegians, Steigen writes in one of the newsletters, “our board of directors bring expertise in many other areas including education, travel, and hospitality, all very significant for businesses in California.”

As part of getting the message out, they have tweaked the NACC acronym to represent: “Networking, Alliances, Community, Collaboration,” which Steigen welcomes other chapters to borrow. There are three membership tiers: Student; Associate for individuals; and Entrepreneur for small-business owners and entrepreneurial professionals. As an incentive, those who joined online by Dec. 31 were entered to win one of two weekend stays at the Courtyard by Marriott Irvine Spectrum.

“We’ve already had people signing up,” said Steigen. “We have over 50 people in our LinkedIn group, almost 200 people following us on Instagram, and we’ve got a Facebook group.”

On the one hand, the size of LA would seem fertile ground. On the other, the size creates competing business interests. Like many other chapters, the same industries are not viable in all cities.

“In New York, you have the finance industry, big banks, the Norwegian Oil Fund, other big industrial companies,” said Steigen. “Houston has oil. From my perspective, you have a much more corporate structure in terms of membership. Out here, you have a lot more individuals, people pursuing a career in entertainment, musicians, actors, models. There’s a lot of film production companies that may be Norwegian, smaller companies, then individuals, who are potential members for us.

“People who have been here a while have built their own networks. We have to try different things. If we don’t get a good response from the people we know are here, we’ll focus more on what can we do for Norwegian entrepreneurs who want to come to LA.”

In January, there will be a panel on using social media to build your brand, and a joint program with the Finnish consulate, the Swedish Chamber, and a Danish organization, Nordic LA, about music and leadership.

“I’ve met with Norwegians out here to see what they think is needed and what people respond to,” said Steigen. “You have to give people something that can be helpful to them. We don’t always have to have Norwegians featured at our events because that is not necessarily going to help you in your business pursuits. We’re going to need to find some balance. For Norwegian companies that come here, we can help them with business connections and referrals. We want to be a resource for people.

“I have an interest in this because I think it’s a shame there hasn’t been a viable chapter here. There’s a lot of potential. It’s exciting to become more aware of what’s going on out here. We are already seeing that American businesses are excited about the idea of a Norwegian-American Chamber and see the value of getting some attention in this community for future business. If we have events that create value for individuals or for small businesses, then I think they will come.”

A chamber of their dreams.

US Chamber of Commerce: 2019 State of American Business Address

Government, Politics, Trade

U.S. Chamber of Commerce President and CEO Thomas J. Donohue, in his annual State of American Business address today, laid out the business community’s top policy priorities for the coming year, casting the organization’s agenda as a means for preserving, strengthening, and expanding the American dream.

Tackling the U.S. economy’s workforce challenges—including through education and immigration reform—was labeled by Donohue as a key priority for 2019. Donohue also highlighted how modernizing America’s infrastructure, leveraging trade, and making it easier for businesses to go and stay public will be top issues for the year ahead. He rebutted talk of an economic downturn as he touted continued low unemployment, rising wages, and strong growth.

“Our challenge today is to preserve, strengthen, and expand the American dream—and put it within the reach of every child, every family, every worker, and every entrepreneur,” said Donohue. “The Chamber’s agenda for 2019 and beyond is built around this simple idea: to harness our newfound economic strength, do everything we can to keep it going, and to put it to work on behalf of all Americans who hope for a shot at their own unique American dream.”

Donohue’s remarks as prepared for delivery are available online here.

Additionally, Donohue listed several other issues on which the U.S. Chamber will actively engage this year, including health care, energy, regulation and legal reform, cybersecurity, and technology and intellectual property. Today’s event marked the 20th delivery of the annual address by Donohue, who has led the U.S. Chamber since 1997.

Amerikanske Madison med storkjøp i Bjørvika

Property / Real Estate

Amerikanske Madison International er tilbake i det norske markedet etter en storavtale som gir de nesten alt av de publikumsrettede lokalene i Bjørvika.

Avtalen, som er tilrettelagt av Arctic Securities, innebærer seks transaksjoner som gir Madison tilnærmet full kontroll over de kommersielle publikumsrettede arealene på bygulvet i Bjørvika. Madison kjøper Sørenga, Sørengkaia og de tilhørende parkeringsfasilitetene på Sørenga og Munch Brygge. Samtidig har Oslo S Utvikling akseptert et bud på butikk-, kultur- og serveringslokalene i Barcode og nordre del av Bispevika.

Det er gjennom det nyopprettede selskapet Oslo Bay District at Madison har gjort kjøpet. Carl Erik Kreftings Carucel skal etter hvert stå for den kommersielle forvaltningen av eiendommene.

Ved å kjøpe Sørenga, Sørengkaia og de tilhørende parkeringsfasilitetene på Sørenga, samt Munch Brygge, har Oslo Bay District sikret seg kontroll over et utleibart areal på 11 000 kvadratmeter og 270 parkeringsplasser. Det planlagte kjøpet av Barcode og Bispevika Nord vil tilføre ytterligere 27.000 kvadratmeter med utleibart bruttoareal, og dermed bringe totalarealet på grunnplan til 38.000 kvadratmeter.

– Vår visjon er å utvikle Bjørvika til Norges mest attraktive område, og vi er glade for å selge bygulvet til en kjøper som vil bidra til at denne visjonen virkeliggjøres. OSU fortsetter å utvikle boliger og kontorer i Bjørvika, samt næringslokaler på andre tomter vi kontrollerer i Bjørvika. Frem til inngåelse av bindende kjøpekontrakt vil vi også videreføre vårt utleiearbeid i Barcode og Bispevika Nord, sier adm. direktør Rolf Thorsen i Oslo S Utvikling i en kommentar.

Arctic Securities har vært Madisons rådgiver i struktureringen, fasiliteringen og finansieringen av de seks ulike transaksjonene som utgjør majoriteten av bygulvet i Bjørvika og som inngår i det nye selskapet Oslo Bay District. Akershus Eiendom har vært OSU’s rådgiver, samt Stor Oslo’s rådgiver ifm. salget av Munch Brygge.

Mads Syversen i Arctic Securities sier til Estate Nyheter at han ikke kan si noe om den samlede verdien på de seks transaksjonene som har fire selgere.

– Det er jo alltid komplisert med transaksjoner uansett størrelse. Her startet det med at vi la inn et bud på Sørenga, tenkt som et syndikeringsprosjekt. Samtidig hadde vi noen tanker om å samle alt av de kommersielle publikumsrettede virksomhetene på Sørenga. Så viste det seg at mulig å få tak i Munch Brygge og parkeringene. Og så kom OSUs bygulv ut i markedet. Vi begynte jobbingen i juli 2018, så det har vært en lang prosess, sier Syversen.

Han synes det er hyggelig at Madison nå er tilbake i Norge etter å ha eid Statoil-bygget (Equinor nå) på Fornebu og hatt en joint venture med Søylen Eiendom for Eger og Steen og Strøm-magasinet.

– De gjorde det veldig bra der og sett etter nye muligheter i Norge, sier Arctic-sjefen.

– Vi har jobbet tett sammen med Arctic Securities siden 2012 i forbindelse med våre tidligere transaksjoner i Norge, og er svært fornøyde med at Arctic tidligere i høst presenterte oss for ideen om å sikre eierskap av bygulvet i Bjørvika, som vi mener vil være verdiskapende for områdets fremtidige utvikling. Bjørvika har alle forutsetninger for å bli Norges mest attraktive bysentrale område. For å hente ut områdets fulle potensiale er det avgjørende å sette sammen et velfungerende bygulv gjennom et samlet eierskap. De forskjellige eiendomsutviklerne, med OSU som utviklere av Barcode, Bispevika Nord og Bispevika Sør i spissen, har gjort en fremdragende jobb med å legge grunnlaget for bygulvet. Sammen med Carucel er vår visjon og vårt ønske å skape et samlet brukertilbud på bakkeplan som bygger videre på hovedideene som danner grunnlaget for OSU sin utvikling av området og Bjørvikas unike kvaliteter, hvilket vil sikre et best mulig totaltilbud, sier Derek Jacobson, Co-Chief Investment Officer og Managing Director for European Investments i Madison.

Norway considering whether to exclude Huawei from building 5G network

Technology

Norway is considering whether to join other western nations in excluding China’s Huawei Technologies from building part of the Nordic country’s new 5G telecommunications infrastructure, its justice minister said on Wednesday.

The Norwegian government is currently discussing measures to reduce potential vulnerabilities in its telecoms industry ahead of the upgrade.

State-controlled operator Telenor, which has 173 million subscribers across eight countries in Europe and Asia, signed its first major contract with Huawei in 2009, a deal that helped pave way for the Chinese firm’s global expansion.

Telenor and competitor Telia currently use 4G Huawei equipment in Norway and are testing equipment from the Chinese company in their experimental 5G networks.

“We share the same concerns as the United States and Britain and that is espionage on private and state actors in Norway,” Justice Minister Tor Mikkel Wara told Reuters on the sidelines of a business conference.

“This question is high priority … we want to have this in place before we build the next round of the telecom network.”

Asked whether there could be actions taken against Huawei specifically, Wara said: “Yes, we are considering the steps taken in other countries, that is part of it – the steps taken in the United States and Britain.”

Huawei said its equipment was secure.

“Our customers in Norway have strong security requirements of us and they manage the risk in their operations in a good way,” said Tore Orderloekken, Cyber Security Officer at Huawei Norway.

“We will continue to be open and transparent and offer extended testing and verification of our equipment to prove that we can deliver secure products in the 5G network in Norway,” he told Reuters.

In Beijing on Thursday, Foreign Ministry spokesman Lu Kang said the government encouraged Chinese enterprises to obey the laws of the countries where they operate and similarly requested other nations to provide a level playing field for Chinese firms.

“If that equilibrium is broken then it’s not a good thing for either economy,” he told a daily news briefing.

In August, U.S. President Donald Trump signed a bill that barred the U.S. government from using Huawei equipment and is mulling an executive order that would also bar U.S. companies from doing so.

Milliardavtale til IBM

Technology

Nordea outsourcer hele sin stormaskinvirksomhet til IBM. Avtalen er verd drøye 4,6 milliarder kroner. Omlag 120 Nordea-ansatte overføres til IBM.

IBM åpner det nye året friskt. Selskapet har nylig kunngjort at de overtar Nordeas stormaskininfrastruktur for videre drift. Dette er IBM Z-systemer som brukes i Nordeas drift i Danmark, Norge, Sverige, Finland og Polen, opplyser IBM til våre kolleger i Computerworld Danmark.

Denne nye avtalen er en videreføring av et samarbeid som opprinnelig begynte i 2003, men partene opplyser ikke hvor lang tidshorisont denne nye avtalen har.

Overfører 120 ansatte

Som en del av den nye avtalen skal 120 Nordea-ansatte overføres til IBMs serviceorganisasjon. Ifølge Computerworld Danmark dreier dette seg om personell som i hovedsak jobber i Nordea Sverige og Danmark i dag.

«Kontrakten om managed services mellom Nordea og IBM bygger på et aktivt forhold mellom selskapene. Den er forskjellig fra tidligere stormaskinavtaler ved sin unike mulighet til å skrive opp SLA-en (Service Level Agreement) basert på førstehåndserfaringen med å kjøre Nordeas stormaskiner», skriver partene i pressemeldingen.

I IBMs pressemelding er kontrakten oppgitt til å være verd 540 millioner dollar, noe som tilsvarer cirka 4.615.970.000 norske kroner etter dagens kurs.

Norway Oil Lobby Hikes Spending Forecasts, Sees 16% Jump in 2019

Energy

Norway’s oil lobby raised its forecast for investments in the country’s petroleum industry as cost cuts during a three-year downturn made projects more profitable and able to withstand even the recent slump in crude prices.

  • Oil and gas companies operating in Norway will invest 184.5 billion kroner ($21.5 billion) in 2019, the Norwegian Oil and Gas Association said in annual forecasts on Monday. That’s a 16 percent jump from 2018, and compares to a prediction of 153 billion kroner made in December 2017.

Key Takeaways

  • The group raised spending forecasts for each years through 2022. It expects investments to peak this year, remain little changed in 2020, and then drop to 141.5 billion kroner in 2023.
  • The lobby warned that these forecasts depend on framework conditions remaining stable for the industry, following public debate surrounding issues like petroleum taxes.
  • Investments in Norway’s oil and gas industry rose for the first time in four years in 2018, thanks to higher commodity prices and drastic cost reductions.
  • Despite benchmark Brent crude dipping from $85 a barrel to about $58 in the past three months, prices remain above the lows of less than $30 in 2016. Crucially, they also exceed the price needed by recent projects offshore Norway to break even.

Know More

  • Norway’s statistics office in November boosted its oil-spending estimate for 2019 to 175 billion kroner, based on its latest quarterly survey of oil companies.
  • The Norwegian Petroleum Directorate, the industry regulator, is publishing its annual production, investment and exploration prognoses on Thursday.
  • The Norwegian Oil and Gas Association’s members include oil companies such as state-controlled national champion Equinor ASA, Exxon Mobil Corp. and Royal Dutch Shell Plc, in addition to industry suppliers from Schlumberger Ltd to Aker Solutions ASA.

Electric Cars on Course to Be the New Normal In Norway

Automobile / Transport

Almost one-third of all new cars sold in Norway last year ran on batteries, reinforcing the Nordic country’s reputation as the world’s best market for electric vehicles.

Oil-rich Norway aims to eliminate all emissions from new cars by 2025, and offers generous subsidies for buyers who opt to go electric. Other countries, including China, plan to follow suit later. In 2018, all-electric cars made up 31.2 percent of the Norwegian market, an improvement of more than 10 percentage points from the the previous year, the Norwegian Road Federation said.

“In 2018, alternative-fuel cars consolidated their strong position in the market,” the federation’s director, Oyvind Solberg Thorsen, said in a statement.

Tesla Has Proven It Can Sell Cars in Norway. Fixing Them? Not So Much

Norway, a country of 5.3 million, has long been a world leader in sales of electric vehicles. It wasn’t until the first quarter of last year that it was surpassed by Germany, Europe’s biggest car market. The incentives that propped up the Norwegian market include exemption from sales taxes and road tolls.

Solberg Thorsen said he expects an even bigger share of battery-powered cars going forward, as there is still an untapped demand for more family-friendly electric vehicles, with longer range at reasonable prices.

Norway Unemployment Holds at 4% as People Flock to Labor Market

Financial / Investment, Government

Norway’s unemployment rate was unchanged at 4 percent in October for a fourth month as more people sought jobs, providing backing to the central bank’s plan to raise interest rates again over the next months.

Surveyed unemployment edged up to 114,000 from 113,000 in September, while the number of employed grew to 2.714 million from 2.707 million, according to Statistics Norway. The employment rate rose to the highest in at least three years.

Key Insights

  • The strong labor market gives backing to Norway’s central bank’s plan to raise interest rates again in March.
  • Policy makers tightened in September for the first time in seven years as the economy has now fully recovered from the collapse in oil prices in 2014.
  • Central bank in December lowered its long-term rate forecast amid growing concerns over a recent slide in oil prices and slowing growth abroad.
  • The so-called AKU rate is a broad measure of unemployment, which measures the jobless rate via a survey of households.
  • Norway’s central bank prefers to look at registered unemployment, which was 2.3 percent at the end of the year.

What Economists Say

  • “The recent increase in the labor force suggests that labor market tightness is more limited than what the strong employment numbers suggest, thus adding to our view of slight downside risk to Norges Bank’s wage growth estimates for 2019,” Swedbank economist Marlene Skjellet Granerud said in a note.
  • “For Norges Bank, continued strength of labor markets is important in order to ensure that households can cope with higher interest rates, since solid jobs growth and a closing of the output gap is expected to push wages higher and support consumption,” SEB analyst Tobias Ogrim said in a note.
  • “Today’s data release does not affect the outlook for the key policy rate path,” Handelsbanken economist Marius Gonsholt Hov said in a note.