Norway's energy minister, Terje Aasland, has reaffirmed the country's commitment to maintaining and expanding its offshore oil and gas production, stating, "We will develop, not dismantle, activity on our continental shelf." This week, he announced the reopening of three gasfields off Norway's southern coast by the end of 2028, nearly three decades after they were closed, to address supply shortfalls caused by the war in Ukraine and disruptions from the Middle East.
Production Levels and New Frontiers
The decision will help keep gas and oil production at approximately the 2025 level, which has remained stable for nearly 20 years, and maintain that output for the rest of the decade. Norway currently operates 97 offshore oilfields, with three new fields coming on stream last year. The Norwegian Offshore Directorate expects to have "100 and beyond" within the next two years, still producing at least the present level of 2 million barrels of oil daily. The Barents Sea in the high north represents the new frontier for gas and oil, with potential for seabed mineral mining between northern Norway and Greenland, though initial surveys by the directorate indicate this is a more distant prospect.
Energy Security for Europe
"Norwegian offshore production plays an important role in ensuring energy security in Europe," Aasland said. "The world, and Europe, will have a need for oil and gas for decades to come, and it is crucial that Norway continues to develop its continental shelf to remain a reliable and long-term supplier with a high level of exploration activity." The sector generates vast wealth for Norway, but the reopening of the Albuskjell, Vest Ekofisk, and Tommeliten Gamma gasfields has drawn heavy criticism from environmental groups and political opponents.
Environmental Criticism and Greenwashing Accusations
The decision goes against the advice of Norway's environment agency. The Socialist Left party accused the government of "greenwashing." Lars Haltbrekken, deputy leader and environment spokesperson for the party, stated, "It shows that the government is once again blatantly ignoring environmental advice from its own experts. All the talk about responsible oil extraction is nothing but nonsense. It's greenwashing through and through, with vulnerable and important natural areas being put at risk with full awareness."
Equinor's Investments and Job Security
Equinor, the Norwegian energy company in which the state owns 67%, is making a "big effort" to maintain its 2020 production levels of 1.2 million barrels daily up to 2035. According to Equinor's Ola Morten Aanestad, the company is committed to investing $6 billion annually up to 2035, focusing on more drilling, new developments, and pipelines. "It's very important for the market value of the company to keep production higher now than in 2001," he said. Aasland, Norway's longest-serving oil minister, also emphasized the importance of job security for the 210,000 people employed by the energy industry. "It is really important that they wake up in the morning knowing they have a safe job for the future," he noted.
Tax Stability and Sovereign Wealth Fund
Aanestad highlighted that Norway's consistent 78% tax rate on oil and gas firms, in place since the 1970s, has made the country attractive to investors. "Investors know what to expect; it's predictable," he said. This tax revenue is a mainstay of Norway's £1.5 trillion sovereign wealth fund, which helps the country run a sizeable surplus. Norway's approach contrasts with that of the UK, its North Sea neighbor, where the government has ruled out new oil and gas exploration licenses. Terje Sørenes, chief economist at the Norwegian Offshore Directorate, said the aim is to prolong production as long as possible and increase output, which currently provides gas for a third of Europe's consumption. For now, Europe's energy superpower is prioritizing ever more drilling and offshore production well into the 2030s and beyond.
