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BEHIND THE NEWS
PETROLEUM CHANNEL (BTNP) - BACK ISSUES
2014
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P850 Monday, 29 December 2014
Fields in Planning Phase – II
  • A New Approach to Fiscal Incentives
  • Production Allowance for PDOs Under Low Price
  • Scaled Down as Oil Price Rebounds
  • Would Provide a Speed-Up Incentive
  • Good Counter-Cyclical Policy
  • Also Other Policy Elements Required
  • Pay More Attention to Area Coordination
P849 Tuesday, 23 December 2014
New Surprise
  • 23rd Round Announcement Delayed
  • Negotiations about Ice Edge
  • Small Parties Claim Cooperation Agreement
  • Demand Removal of 20 Blocks
  • Companies Have Expected Full Access
  • Confirmed By Several Ministerial Statements
  • Companies Have Invested in 3D Seismic Surveys
  • Encouraged By Minister
  • Will the Government Really Close Parts of the Area?
  • Would Be New Blow to Predictability
P848 Monday, 22 December 2014
What New Normal?
  • Government: Restructuring Desirable
  • Decline Start of Expected Change
  • Not Back to "Old Normal"
  • Oil and Gas Must be "A Little Smaller"
  • Mix-Up of Short and Long Term
  • How Much is "A Little"?
  • Cost Cutting Plus Project Drought Too Much
  • Labour Wants More Active Support
  • But Doesn't Know How
  • Government Rejects Labour's Proposals
  • Industry Left to Fend for Itself?
  • Government Must Define "New Normal"
  • And Contribute With Supporting Policies
P847 Friday, 19 December 2014
Fields in Planning Phase - I
  • Good Project Portfolio at USD 85
  • Oil Price Should be there in Production Period
  • Continued Investment Socially Desirable
  • But Price Decline Still Likely to Delay Decisions
  • Due to Price Risk, Capital Constraints, Etc
  • DNB Markets: 30% Investment Decline to 2017
  • 22 New Fields in Planning Phase
  • Few Ready for Investment in 2015-16
  • At Worst, Large Gaps in 2016-2017
P846 Thursday, 11 December 2014
First Labour Signal
  • NHO Describes Two Scenarios for Economy
  • "Soft Landing" or "Crash Landing"
  • Depends on Depth and Duration of Low Oil Cycle
  • Risk of "Crash Landing" Increasing
  • Labour Reacts to Service Industry Hardship
  • Invites to Broad Political Cooperation
  • But Tries to Ride Two Horses
  • Government Parties Still without Crisis Perception
P845 Monday, 8 December 2014
Investment Outlook
  • New Investment Forecasts from Statistics Norway
  • Stronger and Longer Decline than Earlier Predicted
  • Down 21% from 2014 to 2017
  • Good Fit to Analysts' Expectations
  • What are the Upsides and Downsides?
  • Urgent to Consider Mitigating Policies
P844 Monday, 1 December 2014
Watershed?
  • Analyst: Oil Price Decline is a "Watershed"
  • Actually, Another Cycle
  • Finance Minister: Start of Expected Restructuring
  • Restructure Back when Cycle Ends?
  • Better to Dampen Cycle and Aim at Long Term
  • Finance Minister's Statement Probably Tactical
  • MPE Minister Clearer about Long-Term Perspective
  • How can Authorities Contribute?
P843 Friday, 28 November 2014
Communication Strategy
  • Internal Statoil Communication Strategy Memo Leaked
  • Wants "De-politicisation of Premises for Commercial Activities"
  • Unclear Statement, Confused Reactions
  • But with real Underlying Challenges
  • About Framework Conditions in General
  • Industry Must Present Its Own Story about the Future
  • Integrated Policy and Communication Strategy Required
P842 Tuesday, 25 November 2014
WEO on Gas in EU
  • WEO's and EU's Climate Scenarios Compared
  • Meet Same Targets for Emissions and Energy Efficiency
  • WEO has 13% Higher EU Gas Demand in 2030
  • 2030 Imports 7% Above 2013, against 9% Below in EU Scenario
  • Imports Higher than in 2013 almost up to 2050
  • Gas and Carbon Price Assumptions Contribute to Difference
  • Probably also Regulative Differences
P841 Tuesday, 18 November 2014
WEO vs OMR
  • WEO 2014: Small Changes Since Last Year
  • Oil Demand up 14% to 2040 in Central Scenario
  • Down only 23% in Climate Scenario
  • Gas Demand Increases in All Scenarios
  • In Climate Scenario, 95% of Oil and Gas Demand Remains
  • Increasing Investment in Oil and Gas Needed
  • PE Funds Rushing into Gas and Oil
  • Good Long-Term Outlook for the Industry
  • But First, Continued Pressure on the Oil Price
  • Missing Investment Now Means Risk of Disruption
  • How Will the New Low Cycle Play Out?
P840 Tuesday, 11 November 2014
Standardisation – VI
  • Work Processes and Documentation
  • Standard Contracts Important
  • We Need a new NORSOK-like Process
P839 Monday, 10 November 2014
Standardisation - V
  • Standardising Large Facilities
  • Experiences with Fast-Track and CATs
  • JIP for Subsea Standardisation
  • Four Different Models
  • Several Important Considerations
P838 Thursday, 6 November 2014
Not Much Harder
  • EU Decides on Energy, Climate Plan
  • Doubts about Implications for Gas
  • Model Indicates Modest Import Decline
  • Down 9% Compared to 2013 until 2050
  • Much Too Pessimistic
  • Decline Driven by Very High Future Price Expectation
  • System Costs Increase Strongly at Higher Energy Savings
P837 Wednesday, 29 October 2014
Standardisation - IV
  • What Should Be Standardised?
  • Who Should Standardise?
  • Must not be an Obstacle for Innovation
  • Simplification and Removal of Technical Requirements
  • More Should Be Covered by NORSOK Standards
  • Functional or Prescriptive?
P836 Monday, 20 October 2014
Change of Guard
  • CEO Helge Lund Resigns
  • Natural Career Shift
  • The Expectations about the Successor
  • Good Knowledge of Norwegian Cluster
  • Oil Company and Service Industry Experience
  • Signal from Minister about Norwegian CEO
  • Also about a More Long-Term Strategy
P835 Sunday, 12 October 2014
Status Quo
  • No Change for Petroleum in Budget
  • Jensen: Suppliers Must Restructure
  • Not a Word about Petroleum Tax
  • Nothing for IOR
  • No Lift for MPE, NPD, PSA, Petoro
  • No Real Increase in R&D
  • No Real Increase in CO2 Tax
  • Government Fears Situation in Parliament
  • Liberals Hint at Using Tax for Resource Destruction
  • Labour Holds the Key to Petroleum Policy
P834 Wednesday, 8 October 2014
STEP
  • Statoil's STEP Program for Reduced Costs
  • Efficiency Targets Broadly Welcomed
  • Expense Cuts Running Ahead of Improvements
  • Can Financial Top-Down Governance Increase Efficiency?
  • Or Should Improvements Drive Cost Reductions?
  • Not All STEP Elements Obviously Optimal
  • A Social Case for Being Counter-Cyclical
P833 Thursday, 2 October 2014
Standardisation - III
  • Global Drivers for Changes in Standards?
  • After-Effects of Macondo?
  • Influence from US Prescriptive Rules?
  • Globalization of HSE Practises?
  • Adjustment to Emergence of Cheap Asian Yards?
  • Avoid Being By-Passed by Major Suppliers?
P832 Wednesday, 1 October 2014
Standardisation - II
  • Which Drivers for Changes in Standards?
  • "Creeping Bureaucracy"?
  • Growing Risk Aversion?
  • Return to Old Habits?
  • Tragedy of the Commons?
  • Or More Fundamental, Global Trends?
P831 Thursday, 25 September 2014
Last Word on Utsira?
  • NPD Submits Utsira Report
  • No "Day One" Area Electrification without Delay
  • Area Coverage Feasible by 2022
  • Possible a Little Earlier, but More Expensive
  • Best as Part of Phase 2
  • Christians Claim Bias in Favour of Statoil
  • Yet, Likely that Parliament Settles with 2022
  • What if Phase 2 and 2022 Don't Match?
P830 Wednesday, 24 September 2014
Standardisation - I
  • Diverging Standards Seen as Cost Driver
  • Standards also Becoming more Detailed
P829 Monday, 22 September 2014
New Climate Economy – II
  • Commission on Gas as Bridge
  • Could Be a Part of the Solution
  • Sets Certain Conditions
  • Carbon Pricing
  • Limit Methane Leaks
  • Avoid Replacement of Renewables
  • Not Hard to Meet for Norwegian Gas in Europe
  • Would Rather Improve Competitiveness
  • Yet, Approach is too Limited
P828 Friday, 19 September 2014
New Climate Economy - I
  • Commission: Cost-Effective Climate Mitigation
  • Carbon Pricing
  • More Compact Cities
  • Better Land Use Management
  • More Efficient Agriculture
  • Rain Forest Protection and Reforestation
  • Follows IEA CPS/NPS on Renewables
  • But Not the Two-Degree Scenario
  • De Facto, an Improvement on IEA
  • Gas Can Be Bridging Fuel, with Conditions
  • Radical Phase-Out of New Unmitigated Coal
  • Oil, Gas only Affected by Demand-Side Policies
P827 Tuesday, 16 September 2014
Arctic Barents
  • North Submits Barents Report
  • More Demanding Conditions in Northern Parts
  • Large Need for New Technology
  • Northern Requests for Fiscal Incentives
  • Political Determination Required
  • Better Outlook for Offensive Labour
P826 Monday, 8 September 2014
Down and Up
  • NCS Investment Peaked in 2013
  • Decline in 2014, 2015
  • Not as Deep as Expected?
  • Rebound in 2016
  • Job Cuts in the Service Industry
  • M&M, Rigs, Seismics Particularly Exposed
  • Costs, Weak Oil Price Blamed
  • Also Oil Price Rebound Likely in some Years
  • Can We Cut Costs while Keeping Competence?
P825 Tuesday, 2 September 2014
High Investment, Low Climate Risk
  • IEA: Continued High E&P Investment to 2035
  • Also in Climate Scenario
  • Important for Service Industries
  • Confirms Likely Rebound after Short Dip
  • Low Risk for "Stranded" Investment
  • Largely Limited to Exploration
  • Investor Worries can be Put to Rest
P824 Thursday, 28 August 2014
The Horse's Mouth
  • ONS: IEA Chief Corrects Misquotes
  • Global Oil & Gas Investment must Increase
  • World Depends on Norwegian Oil and Gas
  • Including Arctic Resources
  • Very Concerned about Gas in Europe
  • Wants More Gas from Norway
  • Alternatives more Expensive or less Secure
  • Calls for More Investment in Gas Infrastructure
  • Reminder to Norway about Barentspipe
P823 Monday, 25 August 2014
Rowing to Shore
  • Støre Removes Some Uncertainty, not All
  • Response to Concerns from Trade Unions
  • Also to Reactions from Government Parties, Industry
  • Policy Mainlines Probably Not Seriously Endangered
  • But Risk of Increased CO2 Tax
  • Status Quo Not Sufficient
  • Good Resource Management Requires new Decisions
  • Can the Government Rely on Labour?
  • IHS: NCS Still Very Attractive
  • But Warns against New Political Risks
P822 Wednesday, 20 August 2014
More Nonsense
  • NPD Collects Seismic Data in Barents North
  • Part of its Obligations about Resource Management
  • Mandated in State Budgets
  • Yet, Strong Attacks from Several Small Parties
  • Leave Impression that this is Unexpected
  • But it is Survey #88 since 1971 in Barents North
  • Claim it Violates Non-Socialist Agreement
  • That's Wrong, Too
  • Why this Reckless Relationship to Truthfulness?
P821 Monday, 18 August 2014
Støre's Experiment
  • Støre Connects Area Protection to Climate
  • Hints about Permanent Protection
  • Tries to Redefine Known Labour Policy
  • Would Disguise Possible Policy Shift
  • Trade Union Demands Clarification
  • Conservatives Reject Policy Change
  • Christians Defend Tail-End Protection
  • Other Small Parties Uninterested
  • But all Eager to Restrict New E&P
P820 Thursday, 14 August 2014
Bridge Building – VI
  • More Alternative Financial Models
  • Effects of Different Regulatory Regimes
  • Possible to Use Pipeline's Economy of Scale
  • For Risk Premium and/or Marginal Fields
  • Many Bridging Options, not all may be Feasible
  • Likely that a Good Package Can be Put together
P819 Monday, 11 August 2014
Finally Good Metrics
  • Brookings Assesses Real Costs of Intermittency
  • First Use of New Metrics
  • Discards Levelised Costs for Technology Ranking
  • Wind, Solar, Hopelessly Inefficient
  • Even With Recent Cost Decline
  • Gas, Nuclear Superior as Emission-Savers
  • Gas/Nuclear Choice Depends on Gas, Carbon Price, Politics
P818 Monday, 4 August 2014
More Fishing
  • Labour Leaders on new Fishing Trip
  • Parrot Misquote on Climate Budget
  • Hint that Norwegian Oil Could Stay in Ground
  • Ambiguous about Licensing Policy
  • Want "Discussion about" Tail-End Production
  • Contradict Labour's Own Election Platform
  • Dangerous Game that Must End
P817 Thursday, 31 July 2014
Bridge Building – V
  • Gassco Calls for New Pipeline Investment Models
  • Using Different Investors Possible Game-Changer
  • Large Increase in Upstream IRR
  • Could Alone Be Strong Enough Bridge
  • 7% would Be Good Investment for SDFI
  • Financial Investors Another Good Option
  • Confidence Problem after Tariff Reduction
  • Clarification of Regulative System Required
  • Hard until Litigation is Completed
  • Could Be a Costly Constraint for Barents Decisions
  • Out-of-Court Settlement Fair Anyway
P816 Friday, 25 July 2014
The Dutch Precedence
  • Also the Dutch Differentiate Tax
  • Admitted Voluntarily to State Aid
  • Special Benefit for Marginal Gas Fields
  • Approved by Commission under Derogation
  • Would Increase Security of Gas Supply
  • Route Could Be Tried also by Norway
  • As Contribution to Bridge for Barentspipe?
  • Or Large Joint Effort to Promote NCS Gas?
P815 Thursday, 24 July 2014
Norway's 2001 Argument
  • In 2001, Norway did Like the UK in 2009
  • Implemented LNG Tax Rule without Notifying ESA
  • Argued it was not State Aid
  • State's Rational Interest as Resource Owner
  • Compensation for Harder Conditions
  • Made Playing Field More Level
  • ESA Mobilized after Bellona Complaint
  • Not Enough Time for Proper Procedure
  • Therefore, Derogation for Regional Aid only
  • Arguments have never been Properly Tried
  • But Complements the UK's Arguments
  • Two Principles that Would Solve the Problem
P814 Tuesday, 22 July 2014
The UK Precedence
  • Statoil Suggests Use of UK Model
  • Large Selection of "Field Allowances"
  • No Traces of EU State Aid Process
  • No Subsidies, Says UK Government
  • Must Have Been Accepted by Commission
  • UK Starts New Petroleum Tax Review
  • Still No Worries about State Aid
  • Norway Can Use Similar Design
P813 Thursday, 17 July 2014
Bridge Building – IV
  • What Design for New Barents Rules?
  • Renewal of "Lex Snøhvit" Uphill and Useless
  • Extension to all Large Value Chains?
  • Or a Differentiated Barents Allowance?
  • May Depend on Constraints Set by ESA
  • Even a Good Solution Could be Insufficient
P812 Monday, 14 July 2014
Bridge Building – III
  • Approval under Derogation Possible, not Certain
  • ESA Will Undertake Pro/Con Analysis
  • Pro: Onshore Growth Impulses in Challenged Regions
  • Con: Negative Effects of Distortions for Competition
  • Seven Specific Criteria to Guide Assessment
P811 Thursday, 10 July 2014
Bridge Building – II
  • Promise to Repeat "Lex Snøhvit"
  • Would Cover all Barents Oil & Gas Landing
  • New EU/ESA Guidelines a Hurdle
  • But E&P Not Excluded from Regional Support
  • Raises Hope for Approval of New Tax Incentives
  • Government Still Investigating Opportunities
P810 Tuesday, 8 July 2014
Bridge Building – I
  • Tax Options for Bridging Barents Projects
  • Wanted: Coverage for Positive Externalities
  • Wanted: Adjustment to Highly Variable Conditions
  • Hurdle: EU/EEA Rules on State Aid
  • Hurdle: Avoid Negotiated Tax
  • Three Routes to Investigate
P809 Friday, 4 July 2014
Politicians as Engineers – III
  • Governance is Becoming Unpredictable
  • Parliament Forgets about Sound Steering Principles
  • Misunderstandings about Dialogue Process
  • Also Labour, Government Responsible
  • Socialists, Christians, Want Amended Policy
  • Would Open for More Political Intervention in Planning
  • Rejected by Labour, Government
  • Better Understanding of Good Governance Needed
  • Also as Reconfirmation of Norwegian Credibility
P808 Wednesday, 2 July 2014
New Castberg Delay
  • Castberg Decision Delayed again
  • Disappointing Exploration
  • Field Centre Design, Oil Landing too Expensive
  • But Important for Barents Development
  • Also Important for Regional Spin-Offs
  • Could Be Another Bridging Problem
P807 Monday, 30 June 2014
Barents Future – V
  • Europe Will Need Barents Gas
  • Best Target Period 2022-2050
  • Longer Production Period Means Higher Market Risk
  • 42" Pipeline and Existing LNG Facility Optimal Solution
  • Good Fit to Barents Resources, Gassled Capacity
  • Will avoid Massive Over-Investment in LNG
  • Costs Must Be as Low as Possible
  • Pipeline Important for Economy of Scale
  • Also for Post-2050 Competitiveness and Upsides
P806 Sunday, 29 June 2014
Barents Future – IV
  • Gas Market Recovery Expected
  • Gas-Renewable Alliance in Making
  • Broad Agreement about Gas in "Bridging Period"
  • Could Be Defined as Period Until around 2050
  • 2022-2050 Good Period for Producing Likely Resources
  • Should Be Planning Assumption also for Barents Gas
  • Doesn't Preclude Working for Long-Term Upsides
P805 Wednesday, 25 June 2014
Barents Future – III
  • Can Climate Policy Thwart Our Barents Objectives?
  • IEA's 2-Degree Scenario: Large "Allowance" for Oil & Gas
  • We Can't Fill Ours even with all Likely Resources
  • Also Good Room for Resource Upside
  • 3-Degree Scenario Seems "Most Likely"
  • Then, no Decline in Demand or Oil Price
  • No Norwegian Oil & Gas "Unburnable"
  • Costs, Technology, and Incentives Matter
P804 Monday, 23 June 2014
Barents Future – II
  • What is the Best Time to Decide on Infrastructure?
  • Early Pipeline Decision vs Wait Options
  • Based on Which Socio-Economic Principles?
  • Guidance in MoF Manual on Socio-Economic Analysis
  • Important for Barents Sea Decisions
  • Requires Bridge-Building
  • Makes Long-Term Social Objectives Relevant
  • Must Use Most Likely Values over Project Lifetime
  • 4% Standard for Social Discount Rate
P803 Sunday, 22 June 2014
Barents Future - I
  • Norway's High Expectations for the Barents Sea
  • Short-term Decisions Must Underpin Long-Term Objectives
P802 Monday, 16 June 2014
Politicians as Engineers – II
  • Parliament Approves Utsira Deal
  • Opposition Brags about No Cost Limit
  • Area Electrification "As soon as Possible"
  • What else than Phase 2 Could be "Possible"?
  • To be Defined in Government's PDO Proposal
  • Could Lead to an Earlier Deadline than 2022
  • NPD Asked to Make Assessment
  • Pulled into Irregular Role
  • Parliament also Intervenes about Heat
  • Land Facilities to Have Full Capacity in Phase 1
  • In Total, very Serious Good Governance Violations
  • Increased Uncertainty because of Unpredictable Labour
P801 Friday, 13 June 2014
Pipeline Best
  • Gassco Submits BGSI Report
  • Includes Discoveries up to 2017
  • Commercial Profitability Favours "Long Train"
  • 42" Pipeline Socio-Economically Best in Base Case
  • Only behind "Long Train" in Poorest Resource Scenario
  • Pipeline much Better with Post-2017 Discoveries
  • Bridge to Commercial Profitability Required
  • LNG Train II Falls behind both other Options
  • Preferred Pipeline Start-Up in 2022
  • Requires Start of Feasibility Study Next Year
  • Schedule Demanding, Political Leadership Required
P800 Monday, 9 June 2014
Politicians as Engineers – I
  • Unanimous Committee Report on Utsira
  • Phase 1 Development not to be Delayed
  • Electrification to be Set as Condition for Phase 1 PDO
  • "As Soon as Possible" with Deadline in 2022
  • Could be Met with Best Case Phase 2 Start-up
  • Hurried Schedule Would Freeze Decision Gates
  • Risks for Overruns, Unplanned Delay, Lost Innovation
  • Costly Dedicated Power Project Another Option
  • Both Worse than Making Phase 2 Option Mandatory
  • Takes Political Interference to a new Level
  • No Reservation about Costs
  • Committee Admits Procedure is Irregular
P799 Thursday, 5 June 2014
Good for Diversity
  • Det Norske Acquires Marathon
  • Secures Foundation for Growth
  • Climbs to #6 on Operated Resources
  • Still only 2.6% of Statoil's
  • But Can Start to Take Aim at Saga's Role
P798 Thursday, 29 May 2014
Labour in Panic
  • Minister Explains Utsira Reality to Committee
  • First Labour Reaction to Accept Phase 2
  • Not Accepted by Electrification Partners
  • Unconvincing Back-Pedalling Attempt
  • Ambiguity in Majority Motion Exposed
  • Labour Unpredictable for All
  • Compromise in Committee Likely
  • Commitment about Phase 2 only
  • Majority Alliance Could Break Up
  • Government Still Wants "a Cost Frame"
P797 Monday, 19 May 2014
Power Games – X
  • Opposition Coups Committee Process
  • Will Instruct Government on Area Electrification
  • To be Set as Condition for Sverdrup PDO Approval
  • Implementation "As Soon as Possible"
  • Cables to Be Laid "in Connection with Start-Up Phase"
  • Labour Turnaround on Oil & Gas Governance
  • But Says Decision Will Not Cause Delay
  • Statoil, Government, not so Sure
  • Government Parties Deeply Disappointed
  • Say Committee Solution Could Have Been Possible
  • Government Should Declare it Would Resign
  • Must Avoid to Be Considered Weak and Vulnerable for Pressure
P796 Wednesday, 14 May 2014
Power Games – IX
  • Utsira Hearing in Parliament
  • What Are the Political Options?
  • Discretionary Right to Turn Down PDO
  • Hence, also to Set Conditions
  • Under Which Legal Limitations?
  • Good Governance Sets Stricter Limits
  • Can the State Relieve Companies of Excess Costs?
  • Area Electrification as Separate, Political Project?
P795 Monday, 5 May 2014
Power Games – VIII
  • Political Cost Tolerance Much Increased
  • What Is the Limit to Politically Acceptable Unit Costs?
  • For the Socialist Left Party: None
  • For a Majority: Probably up to NOK 2,000
  • Ridiculous Consequence of Home Cut Paradigm
  • Big Contribution from Sverdrup Group's Own Phase 1 Plan
  • But Implementation May not be as Easy as Many Believe
P794 Monday, 5 May 2014
Power Games – VII
  • Politicians Fear Home Cut Target is Unattainable
  • Competition about Avoiding Blame
  • Pay-Back Time for Labour
  • Fears about even More Expensive Compensations
  • All Contributes to Increased Utsira Cost Tolerance
  • Chicken Game between Large Parties
P793 Thursday, 1 May 2014
Power Games – VI
  • What Motivates the Political Parties?
  • Primary Objective to Gain Power or Stay in Power
  • Self-Serving Tactics or Good Governance?
  • For Small Parties, a Matter of Survival
  • Labour's Choice of Strategies
  • Government Wants to Protect Alliance
  • For now, a Low-Stake Game with Green Cards
  • Even so, Could Eventually Lead Far Astray
  • Large Parties' Committee Members Could Stop Now
P792 Tuesday, 22 April 2014
Power Games – V
  • Motion from Socialists about Day One Electrification
  • Would Instruct Government to Instruct Licensees
  • Calls for Agencies to Design Electrification Solutions
  • Much Potential Conflict when Motion is Processed
  • Other Options than Instruction Mentioned
  • Battle about Getting New Cost Estimates Likely
  • May Be Hard for Government to Resist Entirely
P791 Monday, 21 April 2014
Power Games – IV
  • Private Study Reports Low Utsira Electrification Cost
  • Commissioned by Energy Norway
  • Uses Assumptions Quite Different from Statoil's
  • Incorporates Faulty Field Design
  • Yes, the Oil Companies at Utsira May Be Biased
  • But the Same is True for Energy Norway
  • In Both Cases, Bad Political Governance is to Blame
P790 Friday, 18 April 2014
Burnable Reserves
  • ExxonMobil Responds about "Unburnable" Reserves
  • Screens Projects for Expected 2040 Carbon Costs
  • Concludes that no Part of its Reserves will be Stranded
  • Doesn't Believe 2°C Target Will Be Met
  • Its Own Outlook Points to a Little above 3°C
  • May Be a Realistic Forecast and No Disaster
  • Conclusion Holds even if 2°C is Met
  • Good Start, but not Sufficient Defence
  • Industry Should Show the World Better Scenarios
P789 Tuesday, 15 April 2014
Climate Economics
  • IPCC Reports Indicate Small Welfare Loss
  • Also Moderate Costs of Mitigation
  • But Only With Cost-Effective Policies
  • Modest Social Value of Avoided Emissions
  • Around Current Norwegian Carbon Cost
  • No Armageddon Ahead
  • But Reasonable to Avoid Risks and more Limited Damage
P788 Tuesday, 8 April 2014
Power Games - III
  • "Home Cut" Target in Climate Deals not Binding
  • Constrained by Cost Efficiency, Global Effects, Etc
  • Yet, Widely Perceived as Binding
  • Twice, Labour Tried to Resist Targets
  • Conservatives far from Helpful
  • 2011 Relaxation Initiative from LO Failed
  • Target More and More Expensive
P787 Friday, 28 March 2014
Power Games - II
  • The Story Behind the "Home Cut" Paradigm
  • National Targets in the Kyoto Protocol
  • National Programs Main Source of Global Cuts
  • Cross-Border Programs at First a "Supplement"
  • But Never Seen as Inferior Cuts
  • Today an Absolute Necessity
  • Greens Failed to Follow Shift of Perspective
  • Turned "Home Cuts" into Symbol Policy
  • No Professional Foundation, Vague Reasons
  • How the Two-Thirds Target was Born
P786 Tuesday, 25 March 2014
Power Games - I
  • Most Politicians Aim at full Utsira Electrification
  • PM: May Have to Come in Two Phases
  • Christians, Liberals Want to Instruct Licensees
  • Labour: We Intend to Implement Target
  • But Electrification doesn't Make Sense at All
  • "Home Cuts" Paradigm has become a Straitjacket
  • Uncertainty ahead even for Sverdrup
P785 Monday, 24 March 2014
23rd Round Delay
  • 23rd Round Delayed Up to One Year
  • Needed to Allow Time for Seismic Program
  • A Split in Two Parts?
  • Allow New Nominations?
P784 Friday, 14 March 2014
Ice Edge
  • Greens Demand Exclusion of 20 Barents SE Blocks
  • Allegedly Inside "the Ice Edge"
  • Christians, Liberals Accuse Government of Violating Agreement
  • Claim Support for "Ice Edge" Definition in Management Plan
  • Actually No Such Support in Management Plan
  • "Ice Edge" is a Constantly Moving Corridor
  • Protection Related to Biological Production
  • Never Intended as Barrier against Ice Conditions
P783 Tuesday, 11 March 2014
BSGI
  • Barents Gas Infrastructure Process Underway
  • Gassco-Led Working Group with Oil Companies
  • New Mapping of Gas Prospects
  • All Gassled Financial Investors Participate
  • Main Options Pipeline and "Long Train"
  • Pipeline the Best Socio-Economic Solution
  • Seems to Be Within Reach
  • More Gas Needed, and/or Some State Contribution
P782 Monday, 24 February 2014
As Feared
  • MPE Opens 23rd Round Consultation
  • 61 Blocks Included
  • Smallest Offer Since 17th Round
  • Means Fewest Awards Since 19th Round
  • Many Blocks Excluded due to Sequential Exploration
  • But this is Mostly Business as Usual
  • Confirms that Declining Trend is a Warning Signal
P781 Thursday, 20 February 2014
Effects of Electrification - II
  • Use of Heat Reduces Value of Electrification
  • Cicero Assumes Freed Gas Will Change Energy Mix
  • "Greenwashing" of Electrification
  • No Real Effect Under ETS Ceiling, only Huge Costs
  • Counter-Productive if Better Options are Crowded Out
P780 Tuesday, 18 February 2014
Effects of Electrification - I
  • Political War over Utsira Power Supply
  • What is the Real Climate Effect of Electrification?
  • Cicero Report Tries to Find Answers
  • Underlines Need to Consider Global Effect
  • Large Uncertainties about Assumptions
  • Our Best Case 40% Global Reduction
  • 54% When Allowing for Changing Mix up to 2030
  • Less If Facilities Make Use of Heat from Turbines
  • In all Cases, Unacceptable Unit Costs
  • Also Risk that Emissions will Increase
P779 Saturday, 15 February 2014
M&A
  • Speculations about Statoil M&A
  • Lund: Not Very Meaningful
  • Triggered by New Government's Policy
  • Worst Proposal Super-Merger with ConocoPhillips
  • Better to Use Political Flexibility for more Diversity
P778 Thursday, 13 February 2014
Home and Away
  • Dissatisfaction with Statoil's International Performance
  • Proposals about Splitting the Company
  • International Earnings Are Really Much Lower
  • How much is Due to Different Maturity?
  • Splitting "Home" from "Away" a Very Bad Idea
  • Would Make "NCS-Statoil" Even More Dominating
  • NCS Diversity Must Be Political Priority
  • Even a Domestic Split Alone Would Be Difficult
  • Quiet Dialogue Much More Promising
P777 Wednesday, 12 February 2014
Turnaround
  • Impressive Exploration Results for Statoil
  • Also Impressive on Project Management
  • Not So Impressive Financial Results
  • Shift from Growth to Profitability and Capital Discipline
  • Cuts in Investments and Operating Costs
  • New and Hairy Profitability Targets
  • Important Lesson in Norwegian Tax Debate
  • Signals Approaching End of High Cycle
  • Also New High Cycle after Coming Low
  • Policies Must Aim at Containing Low Cycle's NCS, Macro Impact
P776 Friday, 7 February 2014
Strong Warning
  • Strong Decline in Nominations Since 20th Round
  • Radical Loss of Interest in Norwegian Sea
  • Decline since 22nd Round also in Barents Sea
  • Not Expected after Barents SE Opening
  • More Stability in Number of Companies
P775 Tuesday, 4 February 2014
Holden on Oil & Gas - II
  • Commission Primarily Concerned about Stability
  • Does Not Propose Generally Reduced Activity
  • Suggests Delaying a Perceived Activity Peak
  • Believes this May Dampen Cycles
  • Finds it Very Hard to Propose Means
  • Discusses Slow-Down for Licensing
  • Possible Relevance for Rig Market Only
  • Small Macro-Economic Effect even if Successful
  • Full Miss about Delaying Opening Decisions
  • Admits It Goes Outside Mandate
  • NPD Forecast Shows Investments already Deferred
  • Indications that we are at the Peak of the Cycle
  • Like the Tax Increase, Action Could Speed up Cyclical Decline
P774 Wednesday, 29 January 2014
Holden on Oil & Gas – I
  • Holden III Commission Suggests "Time Shift"
  • Confirms Reality Perception in Other Reports
  • Wage Increase, but Natural Part of Welfare Growth
  • Accepts Dispersion of Knowledge/Productivity
  • Worried about Future for Competition-Exposed Sector
  • More Competition, Terms of Trade, Petroleum Sector Decline
  • Evidence Contradicts "Two-Speed" Hypothesis
  • Only Maritime Sector with Extra Wage Growth
P773 Monday, 27 January 2014
Lien on Tax
  • MPE Minister Comments on Petroleum Tax in Sandefjord
  • Promises Dialogue with Industry
  • Also Discussions between MPE and MoF
  • Lien Confirms Basic Tax Governance Principle
  • Contrary to MoF's "Education" Principle
  • Should Be Enough to Reverse Uplift Cut
  • Lien also Connects Tax to Knowledge and Diversity
  • Wants to Encourage Large International Companies
  • Refers to Large Heterogeneity in NCS Projects
  • Will the Government Share his Reality Perception?
P772 Monday, 20 January 2014
Towards a Political Test
  • Commission Suggests Activity Adjustment
  • Rejected by Minister, Statoil CEO
  • To Be Considered by Parliament in June
  • Smaller Parties Will Put Pressure on Government
  • Compromise, or Cooperation with Labour?
  • Much May Depend on Tactical Considerations
  • These will be Influenced by Public Perceptions
  • Industry Needs Improved Communication Strategy
P771 Tuesday, 14 January 2014
Wrong, but Right
  • Solberg: Knowledge is the Future Oil
  • Well Meant, but Wrong
  • Confuses Production Factors
  • Knowledge Needs to Be Applied to a Purpose
  • Decisive in Past, Present, and Future
  • Weak Understanding of Path Dependence
  • Also Weak on Cluster Firms as Knowledge Producers
  • Otherwise, Policies for Knowledge Building are Good
  • Misleading Use of National Capital
  • Solberg Must Guard against Misuse
P770 Friday, 10 January 2014
Out of coal?
  • Should the Pension Fund Divest from Coal?
  • Labour Goes Far in Saying Yes
  • But Not other Fossil Energy
  • Inspired by Meeting with Obama
  • But Also Its Own Political Needs
  • To Start with, Review Only
  • Predicts Majority in Parliament
  • Government Parties Negative
  • Difficult to Delimit “Black List”
  • Is it a Good Idea at All?
  • Tempting as Means to Protect Gas
  • But Better to Make Deal on More Limited Policy

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