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Norwegian liquids once again surprised to the downside, lower y/y by 0.13 mb/d at 1.78 mb/d in March, despite recovering m/m by 23 thousand b/d. The declines were led by crude, which fell by 0.12 mb/d and remained below 1.4 mb/d for the second consecutive month. Supply also underperformed the NPD’s own forecasts, by 1.5% in March and was attributed to ‘technical’ field issues. We interpret this as a rise in decline rates at mature fields alongside an underperformance at newer assets (the latter are getting smaller in size and more complex in nature). As such, we have raised our underlying base decline rate and now forecast a y/y decline in crude output of 0.1 mb/d in 2019 (liquids at 0.12 mb/d) vs 75 thousand b/d previously. Given that Q1 19 liquids production came in lower y/y by 0.18 mb/d (crude down by 0.15 mb/d), our forecast requires a sharp rise in production in Q4 19, driven by Johan Sverdrup. Rising planned outages pose downside risk to our forecast, with the problematic Goliat field the latest to schedule downtime. Goliat will go offline twice, once for routine maintenance in Q2 19 and again for pipeline pigging in Q3 19. This will add to a maintenance schedule already marked by works at Ekofisk in June, which we expect to reduce output by 0.22 mb/d over a period of a month.
The weakness in March output is reflected by April loadings, which are set lower m/m by 64 thousand b/d (-6%) to the lowest level since 2010 at 1.04 mb/d, driven by Statfjord. This supported the grade’s differential, which flipped to a 10-cent premium to Dated Brent in early March (21 cents higher m/m and the strongest in a year). However, the May loading programme is set to rise by 0.15 mb/d m/m increase ahead of June maintenance at Ekofisk, boosted by higher loadings from Troll (+38%), Oseberg (+35%), and Ekofisk (+13%).