Equinor gets nod for strong Oseberg 2024-25 gas output

The Norwegian energy ministry has given the green light for a high Oseberg gas production quota for the 2024-25 gas year, but has concerns about the effect of an acceleration of gas exports on oil production.

While the ministry would not reveal to Argus how much gas it has permitted state-controlled Equinor to produce from Oseberg in October 2024-September 2025, other details from the permit approval letter suggest that the quota is again high. But the ministry has cautioned that Equinor must ensure maximum recovery of the oil in the main Oseberg Brent reservoir. It has ordered the field's operator to include an updated overall drilling plan in its 2025-26 permit application.

Gas blowdown has begun at the main parts of the Oseberg field, which involves a shift to gas production rather than gas injections as the amount of oil that can be profitably extracted declines. The gas production permit — for Oseberg, Oseberg Sor and Oseberg Ost combined — was 7bn m³ in each of the past three gas years including 2023-24, up from 5bn m³ in 2020-21 and 4bn m³ in 2019-20 (see graph).

The Oseberg licensees also plan to produce part of the gas in 2024-25 that has been "carried forward" from previous gas years. The Oseberg permit has flexibility within defined constraints — shareholders can under or overproduce against their quota and balance it out with higher or lower output in the following gas years.

To ensure sufficient gas production capacity to support its planned 2024-25 exports, Equinor initially submitted a request to the Norwegian Offshore Directorate (NOD) to accelerate two gas wells that it had previously planned to drill after two time-critical oil wells. Following discussion with the NOD, Equinor adjusted its plan and now aims to recomplete one gas well and speed up another gas well. Compared with the option of accelerating two gas wells, this entails a lower risk of the two oil wells being pushed back past the remaining time window for viable drilling, the ministry said. This balance between consideration of remaining oil and ensuring gas production capacity is "satisfactory", according to the NOD.

The ministry, after considering the directorate's advice, assessed that Equinor's requested 2024-25 gas production volume and drilling plan "support good resource management". But the ministry expressed concerns that Equinor's plan to delay drilling of oil wells to prioritise gas wells will mean that reservoir pressure becomes too low for profitable oil extraction.

The ministry specified that it is approving the 2024-25 gas production and drilling plan on the basis that Equinor will extract gas "to the greatest extent possible" from reservoir segments that have the least remaining oil potential, so that the pressure at oil reservoirs is maintained for as long as possible. Equinor must continue to monitor the reservoir, the ministry said. And it should take measures if gas extraction has unexpected consequences and inform the resource authorities of this, the ministry said.

The NOD emphasises that the Oseberg C facility has a shorter expected lifetime than the facilities at the Oseberg field centre. Since only Oseberg C can drill wells to the northernmost segment of Oseberg, called Alpha Nord, all necessary oil and gas wells for this segment must be drilled early enough for reserves to be produced before Oseberg C is shut down. Equinor must also investigate and implement other measures such as low-pressure production to achieve the greatest possible value creation from the Oseberg field, the ministry said.

Equinor must submit its application for a 2025-26 gas permit by 1 February. Its plan needs to include an updated overall drilling strategy, and it needs to be clarified with the ministry in good time for submission, the ministry said.

By Natasha Fielding

Oseberg gas permit vs production bn m³