The Ministry of Petroleum and Energy annually prepares estimates for the activity level on the Norwegian continental shelf. The estimates are based on data from the operators, and evaluations made by the Norwegian Petroleum Directorate and the Ministry of Petroleum and Energy.

-There is still high activity on the Norwegian continental shelf. This is good news, and the authorities and industry must jointly seize the opportunities that arise from high oil prices, through an offensive focus on the Norwegian shelf, says the Minister of Petroleum and Energy, Mr. Odd Roger Enoksen.

The average price per barrel is in the National budget 2007 (NB 2007) estimated at NOK 425 and NOK 390 for 2006 and 2007 respectively. Compared to the Revised National Budget 2006 (RNB 2006) this is an adjustment upward. The uncertainties regarding the development of oil prices are still prevalent. This uncertainty is partially due to increasing oil demand and lack of spare production capacity, in addition to uncertain oil deliveries from several countries.

Norwegian oil production has been at plateau level of about 3 million barrels a day since 1995. The total production of oil (including NGL*) is estimated at 2.8 million barrels a day in 2006, and is expected to increase to 3 million barrels a day in 2007. Liquid production is expected to increase further in 2008, and gradually decrease thereafter. These production estimates maintain those from the previous report (RNB 2006).

Norwegian gas sale is expected at 87 billion cubic metres (BCM) in 2006 and 94 BCM in 2007. In the coming years, a considerable increase in gas sales is expected. In NB 2007 plateau production of about 130 BCM is expected to be reached in 2013.

The activity level is currently very high at the Norwegian shelf. In 2006 petroleum related investments (including exploration costs) are expected to constitute close to 93 billion 2005 NOK. In particular, the investments in the Ormen Lange and Snøhvit fields contribute to the high level in 2006. In 2007 investments are expected to be slightly reduced.

The State’s net cash flow from the petroleum sector is estimated at NOK 360 billion in 2006. Of this, taxes and fees is NOK 216 billion, the State Direct Financial Interest is estimated at NOK 132 billion and dividend from Statoil for the financial year 2005 was NOK 12.593 billion. Compared to RNB 2006, the net cash flow estimates are increased by about NOK 12 billion. This increase is mainly due to increase in oil price estimates. In 2007 the State’s net cash flow from the petroleum sector is expected to be NOK 365 billion.

* NGL = Natural Gas Liquids