After suffering through the worst crisis in a generation, Norway’s oil industry is now back on its feet.
Here are five charts that tell the story of how Norway’s biggest industry tackled the crisis, from the surprising windfalls to the challenges ahead. Most are based on new data from the Norwegian Petroleum Directorate.
1. Recovering Investments
Oil companies in Norway are increasing spending for the first time this year since crude prices collapsed in 2014, the directorate predicted in annual forecasts published last week. Optimism has returned with crude prices hitting $70 a barrel at the same time as drastic cost cuts have made projects even more profitable.
2. Costs Slashed
Forced to react as crude prices hit a low of $27 a barrel in January 2016, oil companies not only cut back on activity levels but also implemented sweeping efficiency programs to lower expenses across their operations. Drilling an exploration well offshore Norway cost about 240 million kroner on average in 2017, half the price from 2013 and 2014, according to the NPD. Operating costs have been reduced by 30 percent in the same period.
3. Production Revival
Arguably the most surprising result of the oil crisis is a spectacular rise in production. Companies have been able to pump more oil and gas thanks to cheaper and faster drilling, smoother platform operations and simpler and quicker development work. After reducing long-term output forecasts in January 2015 and 2016, the NPD raised expectations for the second year in a row last week. Total production is now seen close to 2004’s record in 2023.
Please read the full article at Bloomberg.com