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Chunk of Norway’s Offshore Gas Discoveries Risk Going Untapped

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Chunk of Norway’s Offshore Gas Discoveries Risk Going Untapped

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December 5, 2023

(Bloomberg) —

A swath of Norway’s offshore gas discoveries risk remaining untapped due to challenges ranging from complex reservoirs to costs of production.

By the end of last year, there were 84 gas discoveries off the coast, with estimated reserves exceeding 1.2 billion square meters, the Norwegian Petroleum Directorate said Tuesday. But while there’s significant value potential for many of those, it’s highly uncertain how much can actually be produced, it said.

Roughly two-thirds of the country’s gas resources have yet to be produced. And though output is expected to remain high for the next five years, it will then drop at a “fairly rapid rate,” the directorate said.

Norway has become Europe’s biggest supplier of natural gas, replacing Russian flows that were cut in the wake of Moscow’s invasion of Ukraine. It’s likely to continue to be a key supplier going forward as neighboring countries use gas as a transition fuel amid a green push and develop more climate-friendly alternatives such as blue hydrogen.

“There are considerable gas resources in discoveries and fields in operation,” Kjersti Dahle, the NPD’s director for technology, analyses and coexistence, said in a statement. “It makes sense to think that higher gas prices can drive necessary technology development, coordination and new infrastructure in order to realise this gas, as long as there is the will and ability to do this.”

© 2023 Bloomberg L.P.

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