For the last few decades the ONS conference in Stavanger has focused on the energy industry’s direction from the perspective of North Sea exploration and production business – this year, ONS 2022 will focus mainly on energy transition.
Average emissions from oil and gas production in Norway are low (less than half of the global average) but nonetheless the clean energy transition is high on the political agenda, with particular focus on carbon capture and storage (CCS), hydrogen and offshore wind.
CCS in Norway is closely associated with the oil and gas industry, after 25 years of storing CO2 in offshore geological reservoirs as part of the oil and gas operations. “Longship”, a project being developed by Equinor, Shell and TotalEnergies, seeks to take captured CO2 from other industries onshore and transport to offshore injection facilities for subsurface injection and storage and is expected to become operational in 2024. Equinor has also recently been awarded CO2 storage development licences and expressed long-term ambitions in respect of the creation of pipeline-based infrastructure to contribute to cost reductions for the CCS value chain.
© Shutterstock / Alex StemmersOn offshore wind, a common approach is for traditional oil and gas companies with access to technical competence, project experience and capital to take the lead, teaming up with traditional power companies to form joint ventures to develop such projects. Hywind Tampen, currently under construction in the NCS under the regulatory framework for petroleum, will be the first to power offshore oil and gas platforms and will be the world’s largest floating offshore wind farm. Sanctioning of onshore wind projects, which for some time has been on hold due to popular resistance, has resumed, but economic incentives have now been phased out and it is expected that offshore wind will dominate going forward.
Norwegian production of oil and gas contributes significantly to European energy security, delivering about a third of the British gas consumption and a quarter of the EU gas consumption. Whilst the Norwegian Continental Shelf (NCS) currently produces at a very high capacity, close to maximum, Norway is also being urged by the EU and other countries to increase gas production.
Recent tax changes implemented by the Norwegian Parliament in June 2020 to spark activity in response of Covid-19 and the drop in oil prices have led to a record number of oil and gas projects (mainly tie-backs) being due for sanction in 2022. A period of high activity among contractors and subcontractors to the Norwegian oil and gas industry in the near term is expected, followed by additional production of oil and gas.
Norway has recently taken measures both to increase gas production, including, consenting to increase gas production from several fields (even where this may cause a loss of oil production) and via Norwegian government intervention in a recent labour dispute in July which affected a number of gas producing fields.
Like elsewhere in Europe (in particular), the oil and gas industry has been subject to recent challenges by environmental activists and environmental considerations are high on the agenda of the Norwegian policymakers, seeking to balance these with security of supply issues.
The ONS conference agenda this year will also focus on ways in which Norway, the UK, and the other North Sea EU countries can develop infrastructure together and take advantage of synergies based on conventional energy, in co-existence with wind, hydrogen and CCS infrastructures in the region and will be an exciting opportunity to bring many of the key participants together.
Recommended for you
