Norway drills record number of exploration wells in 2008

Jan 8, 2009, 13:38 GMT

Oslo - A record number of exploration oil wells were drilled 2008 on the Norwegian continental shelf in the wake of record high oil prices, the Norwegian Petroleum Directorate said Thursday.

Oil production from the Norwegian continental shelf is continuing to decline but 2008 oil production was almost 4 per cent higher than the agency's previous forecast.

The production increase equalled 70,000 barrels per day.

In 2008, 242.2 million standard cubic metres of oil equivalents were produced, down roughly 12 per cent compared to the record year 2004 but slightly more than in 2007.

The recent drop in oil prices due to the economic crisis has 'created uncertainty' concerning costs and planned investments in new projects on the Norwegian continental shelf, the agency said in its review of the 2008 oil and gas year.

An oil price of 60 dollars or more per barrel would result in a 'fairly robust' investment level, a lower price might force cost reductions.

In the coming year investments in mature fields and new fields were estimated at 130 billion kroner (18.7 billion dollars), including exploration, pipelines and other facilities.

Another trend was that gas was expected to increase its share of total petroleum sales, and grow from '40 per cent in 2008 to 49 per cent in 2013,' the directorate said.

Director General Bente Nyland said that 56 exploration wells were drilled, almost double the 32 drilled in 2007 and 25 in 2006.

About half the wells - or 25 in all - resulted in yields, Nyland said.

The wells were drilled in the North Sea, the Norwegian Sea, and the Barents Sea.

Norwegian state-owned giant Statoil Hydro accounted for 40 of the wells drilled.

In its outlook for 2009, the directorate estimated some 50 to 60 wells would be drilled.