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PETROLEUM CHANNEL (BTNP) - BACK ISSUES
2015
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P886 Friday, 5 June 2015
Subsidies? – IV
  • Misunderstanding about Liability
  • Echoes MoF on Capital-Based Deductions
  • Well-Known Discussion about Discount Rate
  • Not a Subsidy when Using Observed Rates
  • Even Extra Investment Incentive not Necessarily a Subsidy
  • Snøhvit Tax Break Has Created Much Value for Society
  • None of Bellona's Examples Qualify as Subsidies
P885 Tuesday, 2 June 2015
Subsidies? – III
  • Bellona's Long List of Alleged Subsidies:
  • Tax Deduction for Cost Overruns
  • Tax Deduction for Exploration
  • Tax Refund for Exploration
  • Liability for Accidents
  • Depreciation and Uplift
  • Snøhvit Tax Break
P884 Saturday, 30 May 2015
Subsidies? - II
  • In 2014, State Took 95% of Cash Flow
  • 98% in 2013 and 91% in 2011
  • Proves State also Takes Very High Share of Resource Rent
  • No Subsidy in Total System
P883 Thursday, 28 May 2015
Subsidies? - I
  • Bellona Claims Petroleum Industry is Subsidised
  • Based on Irrelevant WTO Definitions
  • Wrong to Compare Individual Elements with Onshore Tax
  • In Reality, No Definition Available for Industries with Resource Rent Tax
  • OECD Can Only List Possible Subsidies
  • Up to Each Country to Make Final Call
  • Natural for Norway to Test against Own Objectives
  • Produce Socially Profitable Resources
  • And Take a Very Large Share of the Resource Rent
  • No Conflict with International Aim of Removing Real Subsidies
P882 Thursday, 21 May 2015
Ice Edge Risk – II
  • What if Politicians Repeat "Not Start" Rule?
  • No Formal Separation between Barents SE and Rest
  • Any Rule Would Have to Be Applied Everywhere
  • "Not Start" Impossible If Still Tied to Ice Edge Appearance
  • Would Close Half of Entire Barents Sea
  • Must Change to Risk-Based Regulation before 2017
  • Moving PVVA Definition Out of Open Area a Solution
  • A Possible Continued "Not Start" Policy Would Follow
  • Must Be Time Limited
  • Remaining Risk in Wider PVVA Definition
  • Also Likely to Be Resisted by Large Parties
  • Supported by Foreign Policy Considerations
  • Political Risk always Remains, but Very Small
P881 Tuesday, 19 May 2015
Ice Edge Risk - I
  • Government Submits Management Plan Update
  • New Definition of Ice Edge with Permanent Location
  • Large "Particularly Valuable and Vulnerable Area"
  • Entirely Outside Open Areas
  • "Ice Edge Zone" New Name for Actual Location
  • No Consequence for 23rd Round
  • But Opens for Normalized Regime in 2020 Plan Update
  • Reduces Risk for 23rd Round Applicants
P880 Monday, 4 May 2015
Less Hands-Off - II
  • Ministers Start Talks with ESA on Castberg Infrastructure
  • Would Help Bridge Gap between Main Development Options
  • Make Landing Option Commercially Equivalent to FPSO Option
  • Minister Says Landing is Most Valuable for Society
  • Major Step for Opening all of Barents Sea West
  • But Castberg Upstream Economy Not Affected
  • Statoil: 2017 Investment Start Depends on Cost Cuts
  • Allowances Like in UK Could Support Entire Chain
  • But not at the Political Agenda for Now
  • Even So, Positive that Government Opens for Using Tax Tools
  • Next should be Support for Increased Recovery
  • Allowances Would also be No-Regret
P879 Thursday, 30 April 2015
Less Hands-Off - I
  • MPE Says Snorre License Extension Depends on Snorre 2040
  • Minister: Must Go Ahead
  • Government Not So Hands-Off Any More
P878 Thursday, 23 April 2015
Hostile Liberals - II
  • Liberals Want to Ban Oil & Gas in Arctic
  • No More Opening of New Acreage
  • Reduce Uplift
  • Reassess Tax Refund for Exploration
  • Use SDFI to Step Down Exploration
  • Increase Carbon Tax
  • Exclude Many Oil & Gas Companies from Pension Fund
  • Will Sharpen Fronts in Parliament
  • More Cooperation Government/Labour required
  • Labour Clear that it Will Not Attack Supply Side
P877 Monday, 20 April 2015
Methane Leaks - II
  • Less than 0.1% NCS Methane Leaks
  • 3-4% Threshold Compared to Coal Valid for Short Term Only
  • Long-Term Effects Most Important
  • Then, Coal Still Worse Up to at Least 7% Gas Leaks
  • Norwegian Gas in Europe Far Below Low Threshold Anyway
P876 Friday, 17 April 2015
Trestakk and Veslefrikk
  • NPD: New Trestakk Delay Violates Petroleum Act
  • Unusually Strong Reaction
  • Says Project has Good Profitability
  • Time Critical for Resource Recovery
  • Project Delayed Since 2009
  • New Delay Appears to Be Due to Capital Management
  • NPD also Worried about Veslefrikk IOR
P875 Wednesday, 15 April 2015
Hostile Liberals - I
  • Liberals Decide on New Policies for "Green Growth"
  • "Pick the Winner" Strategy
  • Promoted by Selective Support Policies
  • Why this is a Poor Strategy for Growth
  • Innovation from Oil & Gas Cluster Helps also Green Technology
  • Another Reason Why Norway is the Most Stupid Place for Cutting Activities
  • Party Becoming More Hostile to Petroleum
  • Long List of More Adverse Framework Conditions
  • Damaging also for "Green Growth" Interests
P874 Monday, 13 April 2015
M&A Wave?
  • Shell Acquires BG Group
  • Price 52% Above Market Value
  • Analysts: Start of New M&A Wave
  • Cheaper to Buy Companies than Resources
  • Det Norske, Lundin Mentioned as Candidates
  • Would Be Serious Loss for the NCS
  • But Doesn't Appear as Likely
  • Rumours that also Statoil Considers Acquisitions
  • Likely to Increase its Capital Constraints
  • Increased NCS Dominance Must Be Avoided
  • Ministry Should Use the Dialogue Process
P873 Wednesday, 8 April 2015
Methane Leaks
  • Do Gas Leaks Cancel Climate Benefits of Gas?
  • Yes, with Poor Regulations and Practises
  • But Leakage Easy to Mitigate
  • Ensure that All Use Best Practises
  • Government/Industry Initiative Established
  • Good Data only for the US
  • There, Leaks well Below Critical Level
  • Little Known about Rest of the World
  • Very Likely Low Leaks from the NCS
  • Could Improve Our Competitive Position vs Russia
  • Poor Information about European Distribution
  • But Europe will Ensure Low Leaks Anyway
P872 Sunday, 5 April 2015
Optimistic Rystad
  • Rystad Energy: Upturn for Industry in Late 2016
  • Gives Reason for More Optimism
  • More Pessimistic Forecasts Can't Be Ignored
  • Therefore Much Uncertainty
  • Anyway, Confirms Very Large Portfolio
  • Rystad Predicts new Peak and then new Decline
  • Still Risk for Pile-Up of Delayed Projects
  • Confirms Need for No-Regret Policies to Support Activity
P871 Wednesday, 1 April 2015
Schjøtt-Pedersen
  • New CEO for the Norwegian Oil and Gas Association
P870 Monday, 30 March 2015
A Duty, Not an Option
  • Government Can't Ignore Increased Recovery
  • Duty According to the Petroleum Act
  • Must Consider Why Targets are Missed
  • Regulatory Means Alone Can't Meet Potential
  • Underlines Case for Fiscal Incentives
P869 Friday, 27 March 2015
Increased Recovery Endangered
  • Investment Forecast from Norges Bank
  • 1/3 decline to 2017-18
  • Risk for More
  • Strong Decline in Producing Fields
  • Many Increased Recovery Project Could be Lost
  • Shows Urgency of Government Action
P868 Monday, 16 March 2015
What Policy for the Cycle?
  • Government Still Takes Hands-Off Approach
  • But Can't Ignore Risk of Deep Decline
  • Should Implement No-Regret Policies
  • Possible Opening for Increased Recovery
  • Cash Flow Tax System also a Possibility
P867 Friday, 13 March 2015
Already Down a Third?
  • New Delays for Snorre 2040, Castberg
  • Tommeliten Alpha Cancelled
  • Means Larger Investment Decline 2017-18
  • May Already Be a Third Below 2014
  • Increases Risk for Even Deeper Decline
P866 Monday, 9 March 2015
Decrypting Solberg – II
  • PM: Petroleum Norway's Largest Industry for 20-30 Years
  • Says "Restructuring" Will Be Slow
  • Clarifies Government's Own Long Term Reality Perception
  • Even so, New Language Gives Reason for Concern
  • Impression of Fast "Restructuring" Away from Oil & Gas
  • Impression of Favouring "Other Industries"
  • Of Limited Importance Except Possibly for R&D, Education
  • Why the Unfortunate Impression?
  • Influence from Macro-Economic Advisors
  • But These Miss Important Industrial Perspectives
  • New Urgency Convenient as Support for Economic Refoms
P865 Wednesday, 4 March 2015
23rd Round Safe
  • Labour Confirms Support for 23rd Round
  • Government Refuses to Pull any Blocks
  • Towards Dissent from Small Parties
  • Labour Still Undecided on Ice Edge "Definition"
  • Says May Have Consequences for 2020 Management Plan
  • Uncertain whether this has Any Meaning
P864 Friday, 27 February 2015
Decrypting Solberg - I
  • Labour, Centre Party Attack PM
  • Talks the Petroleum Industry Down
  • Endangers Recruitment
  • Insults the Industry's Knowledge
  • Solberg Rejects Criticism
  • But also Responds by Changing Use of Words
P863 Monday, 23 February 2015
IEA's Oil Price
  • The IEA Assumes Low Oil Price Path
  • Lower than Most Norwegian Analysts
  • But Based on Futures, not a Forecast
  • Demand Growth Slow to Overtake Supply Growth
  • US Shale Could Set Ceiling for Some Years
  • Later, More Demanding Resources Required
  • Norway Needs to Follow World on Cost Reductions
  • Then, our Full Portfolio Will Remain Profitable
  • But Still Challenging to Limit NCS Decline
  • Low 2015 GNP Growth a Warning
  • Cost Cuts, Tax Remain Important
  • Attention to Capital Constraints
P862 Tuesday, 17 February 2015
Danish and Arctic Oil and Gas
  • Danish Climate Minister: Denmark to Produce All Its Oil
  • Rejects Green Demands to Keep Oil in the Ground
  • Calls Nature Paper about "Unburnable" Oil Idiotic
  • Paper Much Used also in Norwegian Debate
  • Aims at Showing Effects of Full Cost Efficiency
  • Claims no Arctic Oil can Be Produced
  • Irrelevant for Norwegian Arctic
  • But Shows More Use of Oil and Gas in 2050 than the IEA
  • Useful as Illustration of Sub-Optimal National Policies
P861 Monday, 16 February 2015
Statoil's Efficiency
  • Statoil Increases Efficiency Target to USD 1.7 bn
  • USD 0.6 bn Achieved in 2014
  • Some is Doubtless Real Efficiency Gains
  • But Some is Simply Delays
  • For Full Effect, All Should in the End be Real Efficiency
  • Could Be Demanding to Achieve
  • Shortfall Could have Consequences for Investment Level
  • Vital for Society that Real Gains Are Achieved
P860 Wednesday, 11 February 2015
Statoil's Flexibility
  • Statoil Commits to High Dividends
  • Uses Investment Flexibility to Balance Capital Use
  • Confirms Importance of Capital Constraints
  • 2015-16: Limited Flexibility
  • NCS Investment Probably not Down more than 15%
  • But Projects for Increased Recovery at Risk
  • 2017-18: High Flexibility
  • At worst, Investment Level down Almost to Half
  • Above USD 80, Investment Could Remain High
P859 Wednesday, 4 February 2015
Rotation - II
  • Could there be Efficiency Differences?
  • Redundancy Problem with "Uneven" Schedules
  • Could Sometimes Be Turned to Advantage
  • Calls for Practical Cooperation between Local Parties
  • 2-4 Helps Limiting Loss of Competent Labour
P858 Wednesday, 4 February 2015
Rotation - I
  • New Discussion about Offshore Work Rotation
  • Some Believe in Potentially Huge Savings
  • But Wages Must Follow Number of Hours Worked
  • Not Much Different from Onshore Shift Work
P857 Friday, 23 January 2015
Double Edges – II
  • Greens Demand Rematch on Definition
  • Want Professional Support
  • Polar Institute Won't Play along
  • Battle in Parliament Later
  • Creates Unprecedented Uncertainty
  • Labour Says it Hasn't Decided
  • Shows no Loyalty to Its Own Policies
P856 Friday, 23 January 2015
Double Edges - I
  • MPE Announces 23rd Round
  • All Blocks from Consultation Round Available
  • Four Transferred to APA 2015
  • Much Discussion and Confusion about "Ice Edge"
  • Mix-Up of "Permanent" and Observed Location
  • Different Purposes, Poorly Understood
  • "Permanent" Edge Has Moved Northwards
  • Goes Clear of almost All Open Acreage
  • But of No Real Relevance to 23rd Round
P855 Friday, 16 January 2015
Capital Constraints - II
  • Can the State as Owner Influence Statoil's Choices?
  • Can it Act to Mitigate Companies' Capital Constraints?
P854 Tuesday, 13 January 2015
Crisis or Not?
  • Crisis for Service Industry – Or Not?
  • PM Talks More about Restructuring away from Oil
  • Separates Between Short and Long Term
  • But How Fast Change Does She "Envisage"?
  • Promises Package if Change is Faster
  • But Unclear about Contents and Purpose
  • Is Parliament Report on Petroleum Still Valid?
  • Perhaps Not Crisis Yet, but Quite Possible Later
  • Anyway, a Matter of Good Management of Cycles
  • Easier to Even out Cycles at Start of Low Cycle
  • No-Regret Policies Should Be Implemented Now
P853 Friday, 9 January 2015
Capital Constraints - I
  • How Will Statoil Adjust to Capital Constraints?
  • Equation about Dividends, Investment, and Debts
  • Many Analysts Recommend Cutting Dividends
  • Better to Invest for Value Creation
  • Worst Case: 50% Cut in Both
  • Minister Expects Investment for the Long Term
P852 Monday, 5 January 2015
Increased Recovery
  • 165 Possible Projects for Increased Recovery
  • Clear Risk for Delays in Low Cycle
  • Special Tax Incentive Could Give Quick Results
  • No Regret Counter-Cyclical Policy
  • The UK Already Has a Brown Field Allowance
P851 Friday, 2 January 2015
Security of Demand
  • EU Parliament Committee Reports on Energy Security
  • Brands Russia as Unreliable Gas Exporter
  • Wants to Improve Infrastructure for Norwegian Gas
  • Based on Communication from Commission
  • Commission Wants Reinforced Partnership with Norway
  • Security of Demand Firmly Established
  • Important for Norwegian Preparations for Barentspipe
  • How Can Norway and the EU Cooperate?

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