Norway oil data – Nov 2018

Published at 10:13 19 Dec 2018 by

Norwegian liquids production rose m/m by 23 thousand b/d to 1.88 mb/d in November. While output registered y/y gains (+12 thousand b/d) for only the second time this year, it remained 4% below NPD forecasts due to the shutdown of the Sture oil terminal and the Kollsnes gas processing plant, alongside natural declines. Ekofisk also faced unplanned outages, leading to at least eight cargo deferrals, with the December Ekofisk loading programme now showing a m/m rise of 50 thousand b/d, while Troll is higher by 70 thousand b/d. Norwegian production has come in lower y/y by 0.12 mb/d in the year to November—4.5% below NPD forecasts. In 2019, we expect another y/y decline, with decline rates offsetting new capacity additions. Output should rebound in 2020 if the giant 0.44 mb/d Johan Sverdrup field comes on as scheduled in Q4 19. Flow rates are expected to be very high at this field, with a quick ramp up to capacity. The field will produce a medium sour (28 API, 0.8 sulphur) crude, but its sulphur content of less than 1% should still allow it to find homes for blending in an IMO 2020 world. Meanwhile, Equinor has announced plans to boost production at the Vigdis field—which feeds into the Gullfaks blend. Vigdis production averaged 27 thousand b/d in the year to October 2018. Condensate output should also receive a small boost from the start of the Aasta Hasteen gas field in mid-December. This will help facilitate another gas field, Snefrid North, due in end-2019.

With naphtha recovering somewhat as it is the preferred feedstock in steam crackers over LPG and gasoline cracks moving into positive territory, Ekofisk diffs to Dated Brent have steadied, although with Urals rallying amid a still tight sour crude market, the Ekofisk-Urals differential, which normally averages $2-4, has collapsed back towards record lows of below 40 cents.

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