RETURN TO SERVICES FOR NON-SUBSCRIBERS
HIT RELOAD TO UPDATE IF SHORT TIME SINCE LAST VISIT

BEHIND THE NEWS
PETROLEUM CHANNEL (BTNP) - BACK ISSUES
2013
Access to full text requires subscription.
P769 Monday, 30 December 2013
Don't Put Trust in Overruns
  • NPD Cannot Conclude on Foreign Overruns
  • Rather Blames Operators' Lack of Preventive Action
  • May not Apply to Statoil, because of Good Track Record
  • Still a Real Risk with a Real Cost
  • Proposals to Supervise Operators' Follow-Up Plans
  • Mitigation Can't Be Expected to Remove all Risk
  • Case for Higher Risk Correction
  • Limited and Variable Addition to Proximity Advantage
P768 Sunday, 29 December 2013
The Overrun Factor
  • Lost Contracts Could be Due to Misinterpretation of Market
  • If so, Loss of Competitiveness Can be Modest and Gradual
  • Rystad Report Suggests 30% Historical Proximity Advantage
  • Has Probably Been Eaten Up by Costs and Lost Productivity
  • Can also Have Been Implicitly Reduced by Customers
  • But Is It Really Much Higher, Due to Overrun/Delay Risk?
  • If so, How Persistent Can this Extra Advantage Be?
P767 Saturday, 28 December 2013
Competitive Yards?
  • Why Did the Yards Lose so Many Contracts?
  • Not a "Boomerang" Effect via Generic Wage Growth
  • Fast Expansion Likely to Have Hurt Productivity
  • Also other Sources of Productivity Loss Possible
  • Must anyway Have Harmed Competitiveness
  • Yards Particularly Dependent on Proximity Advantages
  • What Are These Advantages?
  • How Far Can They Compensate for Productivity Loss?
P766 Friday, 20 December 2013
Warning Signals
  • New BI Report on Service Industry
  • Confirms Role as National Knowledge Base
  • Technology Spin-Offs to other Industries
  • But Disturbing Warning Signals in Recent Years
  • Slow Growth in Value Creation
  • Strong Growth in Employment
  • Productivity 15% Down in Period 2008-2012
  • Still 47% above Onshore Average
  • Most of the Causes Probably Internal to the Industry
  • More Research Needed
  • Not Evidence for Extortion of Resource Rent
P765 Thursday, 12 December 2013
Emeralds
  • A Knowledge-Based Norway Revisited
  • Why a Cluster-Based Approach is Important
  • Knowledge Structure Supports Resilience
P764 Monday, 9 December 2013
Gassled to Litigation
  • Minister Upholds Gassled Tariff Decision
  • Three Owners Confirm they Will Sue the State
  • Njord is Assessing the Situation
  • No Decision on Whether they Will Sue Sellers
  • Won't Invest in Polarled
  • Decision too Quick, no Dialogue as Promised
  • Uncertainties about Future Practice Still Remaining
  • Could Harm Barentspipe Unless Clarified
P763 Saturday, 7 December 2013
Still Competitive
  • Menon: New Indicators for Competitiveness
  • Manufacturing Industry Still Competitive
  • Only few Branches in Trouble
  • Marginal Decline in Global Market Share
  • Less than other Nordic Countries
  • Less than the US and many EU Countries
  • Oil & Gas Related Production Additional
  • NCS Investment Growth only 10% of all Demand Growth
  • Multi-Speed rather than Two-Speed Economy
  • Also Within Non-Oil Manufacturing Industry
P762 Wednesday, 27 November 2013
Relaxed Productivity
  • Why Has Productivity Growth Relaxed?
  • Many Possible Reasons, some of them Transient
  • One May Be Less Dispersion from Offshore
  • Anyway, Reduced Activity Counter-Productive
  • New Government to Appoint Productivity Commission
  • Should also Cover Petroleum Sector
P761 Monday, 25 November 2013
Wage Leak?
  • Suppliers' Profits Highly Variable across Cycles
  • Wage Leak to others Limited to the High Cycle
  • Appears to Be Small even through Current Peak
  • Cost Competitiveness Loss 1/3 of Earlier Assumed
  • Wage Share of Value Added like Other Countries
  • Contradicts Theory of Large "Wage Bubble"
P760 Thursday, 14 November 2013
WEO Highlights - II
  • Gas Expands By 20-50%
  • EU Gas Import Grows in All Scenarios
  • Norway only Needs to Maintain its Share
  • Deindustrialization in the EU due to Energy Prices
  • Small Oil Sector Investment Risk
P759 Thursday, 14 November 2013
WEO Highlights - I
  • Word Energy Outlook 2013 Released
  • Main Scenario: 76% Fossils in 2035
  • 450S Climate Scenario: 64%
  • Oil Demand +/-13% Compared to 2011
  • Warning about Possible Oil Supply Shortage
  • "All New Sources of Oil Crucial"
  • Oil Price USD 128 in 2035
P758 Monday, 11 November 2013
Net Cuts
  • New Government Submits Revised Budget
  • Increases Petroleum-Related R&D
  • Minor Increases for NPD, Petoro
  • Cuts More on Geological Surveys
  • Net 19 Mill Cut on Resource Management
  • Also Large Cuts for CCS Test Centre
P757 Monday, 21 October 2013
Lien
  • Tord Lien New MPE Minister
  • Will Maintain High E&P Activity Level
  • Will Do Better on Framework Conditions
  • Will Develop more Renewable Energy in Norway
P756 Monday, 14 October 2013
LoVe Revival?
  • Solvik-Olsen Expected in MPE
  • Promises New LoVe Solutions for 2017
  • Important Signal to Region
  • New Discussions in Lofoten Council
  • Joint Process for World Heritage and E&P Suggested
  • Can Political Deadlock be Broken by 2017?
P755 Wednesday, 9 October 2013
A Good Restart
  • Government Platform Clear
  • Positive Attitude to Petroleum Industry
  • Acknowledges Long Time Perspective
  • Acknowledges Industry as Knowledge Base
  • Business as Usual on Licensing
  • Will Consider Tax Amendments
  • But Will Not Reverse Uplift Reduction
  • New Evaluation of Gassled Tariffs
P754 Tuesday, 1 October 2013
Surrender
  • Conservatives, Progress Party in Government
  • Agreement with Liberals, Christians
  • Full Surrender on Lofoten/Vesterålen
  • Veto Right Granted to Minority - Again
  • Majority Parties Lost Psychological War
  • Stick and Carrot Strategy Failed
  • How to Reaffirm the New Government's Credibility
P753 Monday, 30 September 2013
Source Rock
  • Large Benefits from E&P to Non-Oil Industries
  • Research Finds Substantial Productivity Spill-Overs
  • Strong Correlation from E&P to Onshore Growth
  • Also Non-Oil Manufacturing Benefits, but less
  • Two-Speed Economy, but no Contractions
  • No Evidence of Dutch Disease
P752 Tuesday, 24 September 2013
Stick and Carrot
  • Centrist Parties to Decide Tomorrow
  • LoVe E&P Central Negotiating Chip
  • Stop or Slow-Down if Centrists Join
  • Protests from Business, Unions, Northern Norway
  • Faster Progress if Centrists Stay Outside
P751 Saturday, 21 September 2013
Crash Landing
  • Government Shelves Mongstad Full Scale CCS
  • Opens for Competition among other Projects
  • Will Extend Capacity for Test Centre
  • Much Delayed Decision has Set CCS Effort Back by Years
  • Failure Inherent in Original Strategy
  • Non-Socialists Should Not Repeat Mistake
P750 Thursday, 5 September 2013
LoVe Important in Election
  • Close Race in New LoVe Survey
  • 30% Say Issue Important for Choice of Party
  • Largest Part of these Likely to Favour E&P
  • Disappointing these is Politically Risky
P749 Wednesday, 4 September 2013
Oil and the Poor
  • Old News from Research Group
  • Small Price Impact from NCS Production Change
  • Cuts Won't Do Much Damage to the Poor
  • But Won't Mean Much for Climate, Either
  • More Widespread Cuts Certainly Damaging for Both
  • A Bad Idea for both Climate and the Poor
P748 Wednesday, 28 August 2013
Twice Marginal and Thrice Risky
  • Researchers Report on Oil Production Cuts
  • Only 35% Effective on Global Emissions
  • Means Extremely High Unit Costs
  • Only Marginal Cut Could Make Theoretical Sense
  • 3.4% Under Report's Own Assumptions
  • 1% Assuming IEA's 2035 Carbon Price
  • Would Almost Only Affect IOR Projects
  • Assumes 2/3 "Home Cut" Policy
  • But Supply Cuts work Abroad and Defeat Assumption
  • Makes Report's Constraint on Policy Options Meaningless
  • Report Can't Find Safe Implementation Means
  • Extra 52 USD/bbl Tax Required
  • Would Destroy NCS Competitiveness
  • Could Overshoot Target and Cut Production in Half
  • Report Ignores Effects on Natural Gas
  • In Real World, No Upside and Huge Downside
P747 Wednesday, 7 August 2013
Not So Unburnable
  • Rystad Reports on "Unburnable Carbon"
  • 78% of Oil Can Be Produced to 2050
  • 97% of Gas
  • Assumes IEA Two-Degree Scenario
  • High Carbon Price, Lower Oil Price
  • Probably Higher Gas Price
  • Many New Developments Too Costly
  • But Exploration Will Continue
  • Still High Share of Coal Emissions in Scenario
  • With Lower Share, all Oil & Gas Can be Used
P746 Wednesday, 24 July 2013
CCS Conundrums - VI
  • Attractive Package Strategy Possible
  • Lump Sum Bidding for One Gas Power Plant
  • Unit Price System for Industrial CCS
  • Separate Decision for Svalbard Power
P745 Tuesday, 23 July 2013
CCS Conundrums - V
  • High Regularity Possible for New Gas Power
  • Likely to Help Mitigate Intermittence Problem
  • Swing Production, too, with Capacity Payments
  • Gas Would Help Secure Supply in Dry Years
P744 Wednesday, 17 July 2013
CCS Conundrums - IV
  • Only Gas/CCS of Strategic Importance
  • Greenfield more Important than Retrofit
  • Also Cheaper, more Convincing
  • Projects Have Different Objectives
  • Different Decision-Making Criteria Required
  • Possible Changes after Gassnova Report
P743 Monday, 15 July 2013
CCS Conundrums - III
  • Gassnova Shortlists Five CCS Projects
  • Sargas, Svalbard Coal, and Three in Industry
  • May Not Have Captured all Greenfield Projects
P742 Thursday, 11 July 2013
CCS Conundrums - II
  • Government Rejects Sargas CCS Project
  • Mongstad CCS into FEED Bidding Phase
  • Likely to Be Stopped by Non-Socialist Government
  • Only One CCS Applicant in Second EU Round:
  • Greenfield Coal Power in the UK
  • UK Gas Project Still Alive, but for How Long?
  • Europe Entirely without Gas-Based CCS?
P741 Monday, 8 July 2013
The Growth Years
  • NPD Submits Resource Report 2013
  • Summarizes Two Growth Years
  • New Discoveries, New Areas
  • Total Resource Base Grows by 9%
  • Equals Five Years of Current Production
  • MPE Target Path Exceeded until 2026
  • Thereafter, Large Unfilled Gap
  • Biggest Potential in Hardest Areas
  • Then, IOR, Luck, or Unconventional
P740 Thursday, 4 July 2013
Invisible Climate Hand
  • Professor Proposes new Mitigation Policy
  • Ties Tax to Real Temperature Change
  • Would Boost Diverse Climate Research
  • Futures Markets Would Synthesise Knowledge
  • Revenue Gain Offset by Lower Income Tax
  • But Must Be Sole Mitigation System
P739 Monday, 1 July 2013
Towards Litigation?
  • Final MPE Decision on Gassled Tariffs
  • Implementation Delayed by 3.5 Years
  • Exemption for Two More Areas
  • Will Increase NPV of Investors' Income
  • Investors: Far from Sufficient
  • No Analysis of what Went Wrong
  • Nothing about Improving the System
  • Decision Clarifies Basic Principles
  • But without Discussion of other Options
  • System Still in Much Need of Improvement
P738 Wednesday, 26 June 2013
22nd Round
  • 22nd Round Same Size as 21st
  • Could have Been Bigger
  • First Licenses inside Svalbard Box
  • Statoil Decidedly More Modest
  • Chevron, Exxon Missing
  • Break-Through for North
P737 Wednesday, 19 June 2013
What Next?
  • What Will the Non-Socialists Do on Tax?
  • And What Should they Do?
  • Reverse Uplift Reduction Most Sensible
  • Or, Start with Small Production Allowance
  • Then, Prepare Comprehensive Tax Reform
  • Understand Complexity and Avoid Whims
  • Extra Investment Incentive Has Advantages
  • Facilitates Faster and Cheaper Frontier Development
  • Improves Quality and Saves Life-Cycle Costs
  • Favourable for Norwegian Industry
  • Increased Recovery Best Served by Production Allowance
  • Would Be Targeted Directed at Resource Management
  • Possible to Reduce Future Upsides if Necessary
P736 Monday, 17 June 2013
Gassled Options
  • MPE Close to Gassled Tariff Decision
  • Minister: Not a Compromise
  • Yet, some Change Likely
  • Various Proposals from Investors
P735 Sunday, 16 June 2013
Risk-Free Politics
  • Parliament Approves Tax Increase
  • Only Progress Party Votes Against
  • Conservatives, Christians Don't Dare
  • Argue Against, Vote For
  • Strangest of Strange Arguments
  • But Call for Review in the Budget
  • Suggest Other Incentives for IOR
  • Perception of Political Risk Warning to Industry
P734 Monday, 10 June 2013
Investment Incentives - II
  • Professors Slam Tax Proposal
  • Theoretical, Simplified, and Unrealistic
  • Elementary Errors of Analysis
  • Can MoF Tell Companies How to Run their Businesses?
  • Statoil: Hurts IOR and Frontier Development
  • Petoro: Favours Cheap Solutions, Low Recovery
P733 Wednesday, 5 June 2013
Investment Incentives - I
  • Statoil Delays Castberg Because of Tax Proposal
  • Does the Tax System Cause Over-Investment?
  • Why it in Reality rather has a Small Opposite Effect
  • What is the Real Marginal Tax on Investment?
P732 Wednesday, 29 May 2013
Theory-Driven Risk
  • Risk of Creeping Tax Increases
  • Dangerous Conflict on Tax Theory
  • Poorly Understood in Public Discussion
  • Large Wedge Also to Current System
  • Disturbing Political Signals on Procedure
  • Threat to Resource Management
  • Politicians Can't Take Risk of Ignoring Theory
P731 Thursday, 16 May 2013
Dichotomy Theories - III
  • Not Much Resource Rent Astray
  • Suppliers' Value Creation is Real
  • Cluster Effects, not Monopoly
  • Real Productivity Probably Under-Estimated
  • Can 5% of the Workers Leverage All?
  • No Sudden Sunset - If at All
P730 Thursday, 16 May 2013
Dichotomy Theories - II
  • Monopoly for Service Industry?
  • Are Suppliers Extorting Resource Rent?
  • Is this a Cause of Wage Contamination?
  • Is Onshore-Norway a Big Inflated Balloon?
  • Is there a Risk of Sudden Puncture?
P729 Wednesday, 15 May 2013
Dichotomy Theories - I
  • Dichotomy Caused by Wage Contamination?
  • Driven By Oil Companies' Excessive Resource Rent?
  • Actually, the State Takes All Resource Rent
  • Possible Weakness in Wage Negotiating System
P728 Friday, 10 May 2013
Dichotomies - II
  • Complete Government Turnaround
  • Denied Intervention Would Reduce Dichotomy
  • Denied Crowd-Out Effects, Rather Additional Advantage
  • Denied Usefulness as Counter-Cyclical Regulation
  • Most Effect Would Come when Least Needed
  • But MPE Minister Doesn't Believe Investment Will Suffer
  • Why, then, Dichotomy as the Justification?
  • In the Background, Old MoF Cost Theory
  • Springs Suddenly to Life after 13 Years
  • PM Wants to Eat Cake and Have It, too
  • But Industry Will Have to Add Political Risk Premium
  • If Non-Socialists Go Against, Something Good in the End?
P727 Friday, 10 May 2013
Dichotomies - I
  • Government Proposes Reduced Uplift
  • Allegedly to Help Onshore Industry
  • Based on Macro Speculations
  • Real Effect Most Likely the Opposite
  • Contrary to all Earlier Statements
  • No Consultation
  • New Blow to Norway's Predictability
  • Committee Hearing already at 16 May
  • Can the Opposition Accept this Pressure?
P726 Friday, 3 May 2013
New Peak and New Decline
  • New Production Peak in 2021
  • 94% of 2004 Peak
  • Shows Targets Can Be Reached by Much Effort
  • Steep Investment Decline after 2017
  • Useful Correction of Public Macro Debate
P725 Thursday, 2 May 2013
Opening and Delay
  • MPE Submits Barents SE Opening for Parliament
  • Mostly Same Terms as in Barents South
  • License Awards in the 23rd Round
  • Jan Mayen Opening Delayed
  • Socialists Claim Political Victory
  • Jan Mayen a new LoVe?
P724 Friday, 26 April 2013
Who Should Invest?
  • Gassled Sellers between a Rock and a Hard Place?
  • Likely to Prefer a Compromise
  • Oil Companies Support Intentions with Tariff Change
  • Say Parts of Actual Proposal Faulty
  • Not Interested in a Return as Gassled Owners
  • May rather Want to Exit more from Construction Phase
  • New Model for Attracting Financial Investors?
P723 Wednesday, 24 April 2013
LoVe after Labour's Decision
  • Labour Goes for LoVe Impact Study
  • Final Decision on Opening in 2015
  • Same Minority as in 2009
  • Can Be Compromised away if Red-Greens Re-Elected
  • Otherwise, Impact Study Virtually Certain
  • Also Opening very Likely under same Assumption
  • Emerging Macro Discussion Can Rock the Boat
P722 Monday, 15 April 2013
Financial Worries
  • MPE Defers Decision on Gassled Tariffs
  • May Be Looking for a Compromise
  • Misgivings Voiced from Financial Community
  • Solveig Funders Join Protest Line
  • Speculations about Norwegian Arrogance
P721 Wednesday, 27 March 2013
Liability and Financial Strength
  • EU Preoccupied with Liability
  • Unpredictable Rules Imposed on Oil & Gas
  • Movement to US-Similar System?
  • Opens for Far-Reaching Financial Requirements
  • Could Distort Norwegian System
  • Adverse Impact on Resource Management
  • Also a Disincentive for Innovation
P720 Wednesday, 27 March 2013
Smaller Elephant, Still in Glasshouse
  • EU Council, Parliament Agree on Safety Directive
  • Cleared also by Parliament Committee
  • Final Decisions Expected in May
  • Generally Welcomed in the UK
  • Still more than Nuisance for Norway
  • Not EEA Relevant, Says Minister
P719 Friday, 22 March 2013
Returns and Predictability
  • Consultation Process Completed
  • Very Mixed Opinions
  • New Investors Invite to Compromise
  • Most Shippers in Basic Agreement with MPE
  • But Reservations about Proposal's Design
  • Three Majors Warn about Investment Incentives
  • Strong Warnings from Finance Community
  • Very Hard to See Implementation by 1 May
P718 Wednesday, 20 March 2013
Not Overwhelming
  • Resource Estimates for Barents SE and Jan Mayen
  • Welcome New E&P Potential
  • But not Overwhelming
  • Hard and Slow Work, as Usual
  • Not Sufficient to Drop LoVe
  • LoVe Beats other Areas on Likely Activity Levels
P717 Wednesday, 13 March 2013
Gassled Tariffs - IV
  • Poor Foundation for Bottom Line Regulation
  • Because Financial Investors Were not Expected?
  • Was Bottom Line Regulation Still Foreseeable?
  • How Strict and Under Which Conditions?
  • Question Asked in Parliament
  • All Actors Share Responsibility for Current Predicament
  • Situation Points towards a Compromise
P716 Tuesday, 12 March 2013
Gassled Tariffs - III
  • Poor Transparency for Gassled Foundation
  • May Explain Different IRR Perceptions
  • Pre-Tax Entrance Value Interesting Candidate
P715 Tuesday, 5 March 2013
Gassled Tariffs - II
  • MPE: Reasonable Returns also with New Tariffs
  • Could Be Cut to Half, Say Financial Investors
  • MPE Memo: 10% IRR already Passed
  • Covers all Cash Flows Back to 1975
  • But Only Gassled Period Relevant as Test
  • MPE: Also this Test Has Been Met
  • Is Gassled Bottom Line or Price Regulated?
P714 Friday, 15 February 2013
Gassled Tariffs - I
  • Consultation on Gassled Tariffs
  • MPE Proposes 90% Cut for Most Future Contracts
  • Seen as Important to Incentivize new Gas
  • Also Helpful for Barentspipe Project
  • Says Owners Still Will Get Reasonable Returns
  • New Owners Concerned, May Run into Hardship
  • Questions about Predictability of Norway for Investors
P713 Thursday, 31 January 2013
Labour Goes for LoVe
  • Labour Commission Wants Impact Study
  • Final Decision Depends on Outcome
  • Hopes for Compromise with Socialists
  • But Commitment Strong if Labour is Alone
  • Progress Party: Opening as Soon as Possible
P712 Monday, 28 January 2013
APA 2012
  • Fewer Awards than in APA 2011
  • North Sea Holding Up
  • Much Competition
  • Statoil Less Dominant in APA Rounds
  • Six Companies Satisfied, others Silent
P711 Friday, 11 January 2013
The Mouse That Roared
  • Christian Official Wants LoVe Ultimatum
  • Won't Join Government that Says Yes to E&P
  • Up to Party's Convention to Decide
  • Inconsistent with Earlier Statements
  • Would Really Be Self-Exclusion
  • Probably Tactic to Attract Green Votes
  • And to Boost LoVe as a Negotiating Chip
P710 Wednesday, 9 January 2013
Stoltenberg's LoVe
  • PM: We Have Enough Knowledge
  • But We Need even More
  • Socialists: No Ultimatum on LoVe E&P
  • Survey: Small Majority against
  • Voters Rallying Around their Parties
  • Labour Voters More Uncertain
  • Others Much More Certain
P709 Tuesday, 8 January 2013
Asian Coal
  • China Accounts for 70% of Coal Growth, India 22%
  • Why the China/India Cases Confirm IEA's Point
  • China/India Gas Strategy Very Attractive
  • Global Powergen Emissions Could Peak in 2015
  • Cut Distance to 450 Scenario by 40% in Powergen
  • Hard to Achieve, but Wind/Solar Much Harder
  • Golden Age for Gas Should Be Top Global Agenda
P708 Tuesday, 8 January 2013
The IEA Challenge
  • IEA: Relentless Growth for Coal
  • Cannot Be Stopped by Climate Policies
  • Or by Economic Slowdown
  • Only Natural Gas Can Stop Coal
  • Must Compete Fiercely at Low Prices
  • Challenge to Europe, China
  • The Basic Argument for Gas - Simplified
P707 Wednesday, 2 January 2013
Relaxed Liberals
  • Liberal Leader Confirms Non-Obstruction
  • Still Opposed to LoVe E&P, but not a Guarantor
  • Means Party Will Accept Majority Rule
  • Liberal Platform Committee Submits Final Proposal
  • Somewhat Less Hostile to Petroleum Industry

RETURN TO SERVICES FOR NON-SUBSCRIBERS
HIT RELOAD TO UPDATE IF SHORT TIME SINCE LAST VISIT