Overview

Norway is the second-largest exporter of gas in Europe after Russia, and ranks seventh in the world for gas production. The Norwegian Continental Shelf (NCS) has been producing oil and gas since the 1960s; as a result, some of its fields have reached peak production and are now in decline. Norway’s gas reserve-to-production ratio is estimated at 18.8 years by the 2014 BP Statistical Review.

Despite the decline of Norway’s reserves, a 2014 report by Wood Mackenzie concluded the oil and gas sector showed no signs of slowing down in 2013, with high levels of development spend and exploration activity, a large number of asset deals, and a record NOK 176 billion ($30 billion) of capital investment.

Norway consumes little gas - only 4.4 billion cubic metres in 2012, according to the 2014 BP Statistical Review. The majority of this is used in industry and upstream gas production of oil. The country’s geography enables it to employ a considerable amount of hydropower, which provides the majority of its domestic energy generation.

The majority of Norwegian gas is exported to Western Europe - including Germany, the UK, France, the Netherlands and Belgium - via pipeline. The country’s first LNG plant began production in 2007 and exports to the rest of the world. The LNG plant at Hammerfest takes gas from the Snøhvit field in the Barents Sea.

It is likely Norway’s LNG facilities will be expanded as new fields are discovered and developed in the area. However, oil companies operating in the country have come under increasing pressure from the environmental lobby because of the fragile nature of the polar environment.

The Norwegian state majority-owned Statoil dominates gas production on the NCS, but most multinational oil companies have licences there. The Norwegian government keeps tight regulatory control of the petroleum industry as it forms a crucial part of the economy.

Page updated: 01/09/2014