Since this year, Europe's primary source of gas supplies is Norway, followed by global LNG. This means the more Norwegian pipeline gas Europe receives, the more limited its demand for global LNG.
On Dec. 1, Norway’s Ministry of Petroleum and Energy approved Equinor’s plan to invest in infrastructure upgrades that will increase gas production from the Oseberg field from 2026. This will make Oseberg Norway’s third-largest gas field after Troll and Snovhit, in terms of remaining reserves. Oseberg is expected to produce 100 billion standard cubic meters (bn m3) of gas between 2022 and 2040.
"This is a big step for Oseberg, going from being one of our largest oil producers to one of our most important gas producers," said Geir Sortveit, Equinor’s Senior Vice President for Exploration and Production West.
Equinor will invest 10 bn Norwegian krone or almost €1 bn (European Central Bank rate on Dec. 2) in these infrastructure upgrades, including the installation of two new compressors.
With these upgrades, the field’s remaining recoverable gas and oil reserves will rise by 54% from 2026. The Norwegian Ministry of Petroleum estimates that Oseberg’s recoverable gas reserves have dropped to about 64.4 million of standard cubic meters of oil equivalent (around 64.4 bn m3 of gas), from an initial 129.4 m m3 of oil equivalent (129.4 bn m3 of gas). This means the reserves could increase to around 99 bn m3 after the upgrades are completed.
Oseberg is Norway’s third-largest oil field and it started producing natural gas in 2000. Gas exports have risen from an initial 1.4 bn m3 in 2000 to about 8 bn m3 in 2022.
Norway overtook Russia as the European Union’s top gas supplier this year after Russia more than halved its pipeline gas supplies to the bloc. Norway is connected to the EU via an extensive export pipeline network, putting it in a favourable place to be the bloc’s main supplier.
However, Norwegian gas fields have reached their plateau production and gas exports will decline significantly after 2030 unless new large discoveries are made and new gas export infrastructure for developments in the Barents Sea shelf area are constructed. To support these developments, 20-year commitments from gas buyers will be required, according to Morten Frisch, Senior Partner at Anglo-Norwegian energy consultancy Morten Frisch Consulting.
In late November, Norway’s 26th licensing round for blocks in gas-prone virgin hydrocarbon areas particularly in the Barents Sea was delayed until the next parliament election, as part of a budget compromise between the Labour-party-lead minority coalition government and the Socialist Left Party. The next parliament election will take place in September 2025.
Not starting exploration of the Norwegian Continental Shelf’s virgin areas until after 2025 will affect Norway's long-term ability to export gas to Europe, since discoveries in areas without any existing oil and gas infrastructure normally takes up to 10 years to develop, Frisch said.
While the EU is transitioning towards a carbon-neutral economy in which gas will have a limited role, it is increasingly accepting the continued oil and gas exploration and production activities in Norway. Last week, Norway's state-owned producer Equinor announced plans to develop a new field to boost exports to Europe from 2026.
Get in touch and see why the most successful traders and shipping experts use Kpler