Reduction in norwegian oil production

Today, the Government has decided to reduce the oil production with approximately 3 %, around 100 000 barrels a day, as a contribution to stabilise the oil price. This arrangement will be made effective after Easter, and will be applied throughout this year. The production regulation may be suspended if the measures do not have the desired effects, says Marit Arnstad, Minister of Petroleum and Energy.

Today's oil market is characterised by a large oversupply and substantial stock building. Without measures there are prospects for the oil price to fall even more. Substantial volatility in the oil market is considered to have serious impact on the Norwegian economy and the management of our petroleum resources.

An important element in our international energy policy is to contribute to stabilise energy markets. This has been the objective for our role and participation in the global energy producer/consumer dialogue. Stable energy prices are an important condition for stable political and economic development in both energy producing as well as energy consuming countries.

In the National Budget for 1998, Norwegian oil production was estimated to 3.6 million barrels a day. New estimates based on reports from the operating companies, show that the oil production will be considerably lower than the previous estimate. Due to later production starts and lower production level on several fields the new production estimate for 1998 is lowered to 3.2 million barrels a day as an annual average. This is the basis for regulation of production. Altogether; the estimate for the Norwegian oil production is reduced with about 500 000 barrels a day compared to the estimate in the National Budget, including the production regulation measures.

The reduction will be implemented after Easter - when the Ministry and the Petroleum Directorate have had discussions with the different operating companies. This will also make it possible to decide the timing of the production regulations according to when other countries introduce the planned reductions.

The implementation of the production regulations will in principle be executed equally for all fields and companies. A Royal Decree will be submitted 3 April this year.