Petoro delivered NOK 528 billion to the Norwegian state in 2022, more than five times the amount in a normal year. Energy prices are at record highs as a result of the war in Ukraine; a war that will cast a shadow over the geopolitical scenario for quite some time. Norway now covers 30% of Europe’s gas needs. Gas deliveries from the Norwegian shelf increased by eight per cent in 2022

"Secure and stable gas deliveries to Europe are more important than ever before, and Norway is guaranteeing this as a predictable and long-term supplier," says Petoro CEO Kristin Kragseth (pictured above).

The increased gas volumes are caused by increased production permits on several fields, safe and stable operations, in addition to Snøhvit coming back on stream. An ever-growing share of gas is being produced from Petoro's portfolio, with Troll being the most important producer. The Troll field, where Petoro has a 56% ownership interest, represents 60% of all gas reserves on the Norwegian shelf. Troll can produce until 2070. Overall gas production is expected to remain at the 2022-level for the next four-to-five years.

Record-breaking activity 

The tax package has contributed to about NOK 300 billion in investments on the Norwegian shelf. Petoro is part of five of the 13 new development plans (PDOs) submitted in 2022. We are also part of three of four expansions of existing PDOs, as well as one electrification project. Petoro has worked actively in the licences to ensure the projects are sufficiently mature for a decision.

"These projects will secure future production, significant activity for the suppliers, a large number of jobs and not least, a reduction in CO2 from our activities," says Kragseth.

Climate targets will be reached with electrification

Petoro published its first sustainability report in 2022, with the ambitious target of reaching 55% emission cuts from SDFI production by 2030. Electrification with power from shore is the most important measure to achieve this target.

Trust, transparency and dialogue are prerequisites for working together to solve the energy challenges we're facing today; safe, secure and accessible energy for all, while simultaneously transitioning to a sustainable future. "Norwegian oil and gas enjoy a unique competitive position which Petoro is continuously working to strengthen. The oil and gas with the smallest footprint will have the staying power to help satisfy the world's substantial needs for energy," Kragseth argues.

HSE results

There was a total of 18 serious safety incidents in the SDFI portfolio in 2022. This yields a serious incident frequency of 0.5, which represents an improvement from 0.7 in 2021. Falling objects continue to dominate the range of incidents. The personal injury frequency was 3.9, which is about the same level as in 2021. Petoro always puts safety first, and this approach is clearly communicated through the company's expectations for HSE management and HSE culture in the licences.

"The financial results would never have been possible without the long-term, thorough safety efforts on the Norwegian shelf over several decades," says Kragseth.

Financial results

Net cash flow to the state from the SDFI at year-end amounted to NOK 528 billion, 342 billion higher than last year. The cash flow is transferred to the Norwegian state in its entirety. The increase was mainly caused by significantly higher income as a result of stronger oil and gas prices, and increased gas sales.

Total production reached 1,044 thousand barrels of oil equivalent per day (kboed), an increase of 17 kboed compared with the previous year.

Gas production amounted to 109 million standard cubic metres (mill. scm) per day, an increase of seven per cent compared with last year. The increase was mainly caused by higher gas extraction on Troll, a full year of production for Martin Linge and production starting up from Snøhvit following the fire on Melkøya. The average realised gas price was NOK 11.95, compared with NOK 4.78 per scm last year.

Liquids production was 359 kboed, 29 kboed lower than last year. The reduction in liquids production was primarily caused by natural production decline on multiple mature fields, as well as turnarounds. Extraction of NGL products from the gas stream has also been reduced to optimise the value of gas in the strong gas market. The reduction was offset, in part, by contributions from a full year of production for Martin Linge and production starting up from Snøhvit following the fire on Melkøya. The average realised oil price was USD 104, compared with USD 70 per barrel in 2021. However, the price increase in USD was somewhat bolstered by a weakened NOK, meaning that the achieved oil price measured in NOK was 988, compared with NOK 603 per barrel last year.

KeyFacts Energy: Petoro Norway country profile