Press Release

No.: 77/99
Date: 08.12.1999

Regulation of Norwegian oil production

The government has decided to extend the regulation of the Norwegian oil production.

The balance in the oil market has improved considerably since OPEC and other oil producing countries, among them Norway and Mexico, implemented production cuts effective as of 1 April 1999. The oil price has nearly doubled since then, and oil stocks have been reduced significantly.

The strong price increase, however, reflects to a large degree expectations of a tighter market ahead. Furthermore, seasonal demand is normally higher in winter, but decreasing as spring arrives. Uncertainty about Iraqi oil export has also contributed to the price increase. At present, there does not seem to be sufficient reasons for removal of the production cuts that OPEC and other producers have implemented.

Norwegian oil production will be reduced by 200 000 barrels/day in the 1. quarter of 2000. This measure will be removed if other producers fail to implement announced cuts or if the development of the oil market takes other directions than expected .

Any prolongation or reduction of Norwegian production cuts after the 1. quarter of 2000 will be assessed in light of the market development.

Contact:
Sissel Edvardsen, +47 22 24 61 09