Norway says Russian gas rivals pose no threat to export business

By JONAS BERGMAN
Bloomberg

More than any other western European economy, Norway has been pummeled by the slump in the price of oil. But the nation says its gas exports are doing well and competitors such as Russia are unlikely to destabilize that market.

Norway is on track to pump more than 100 billion cubic meters in natural gas this year, Petroleum and Energy Minister Tord Lien said in an interview on Tuesday. According to the nation’s Petroleum Directorate, Norway has produced 75 billion cubic meters so far this year, and output at its giant Troll field is poised to reach an eight-year high.

“This is something we are able to sustain for some time,” he said. “But of course, large investments will be needed both in new infrastructure and new production to keep this up, and even more to increase it.”

Norway is pumping more gas to make up for the shortfall in oil income caused by a 50% plunge in the price of Brent crude over the past 12 months. The nation’s oil companies, including state-controlled Statoil, have cut more than 20,000 jobs to adapt to the new price climate. That’s rattled an economy in which one in nine jobs depends on oil.

Though Norway’s other big export, gas, faces competitive threats from major producers such as Russia, Lien says even suppliers ultimately benefit from more competition.

“Of course it’s good for Europe that there’s diversity in supply and its good for exporters too,” he said. “Competition is good for Norwegian gas in the long-term.”

Lien urged European leaders and regulators to create an environment that’s conducive to growth in the gas industry.

Reaching gas resources in the Barents Sea “will require a bigger lift and it’s important that the EU takes this into consideration in the development of a future energy market,” he said. “One of the most effective ways to reduce carbon emissions in the long-term is to increase gas use.”

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