The largest oil producer in Western Europe, Norway, has announced it will end its government-imposed cuts at the end of 2020.
Following the spread of the COVID-19 pandemic, the associated lockdowns and the resulting drop in oil demand, Norway decided in April to join in efforts to mitigate the glut. It cut production in June by 250,000 barrels per day (bpd), followed by a cut of 134,000 bpd for the remainder of 2020.
Norway typically does not regulate oil production levels, with the last instance being in 2002, when it temporarily cut production by 150,000 bpd after oil prices plummeted to under $20/barrel in the wake of the September 11 terrorist attacks.
The move contrasts with the more cautious easing of production cuts that was agreed by the OPEC+ group at its last meeting. In a statement, Norway’s energy ministry said about this:
“Norway is not part of OPEC+ and is not invited to this meeting. The measures taken by OPEC+ and other countries during the pandemic have been crucial and successful in stabilizing the oil market to the benefit for both producers and consumers.”
While the state-owned Equinor, formerly known as Statoil, is Norway’s biggest producer of hydrocarbons, other multination companies also operate on the Norwegian Continental Shelf. For example, the owner of the Castrol lubricant brand, BP, operates the giant Valhall field through a platform that is entirely powered from shore through a 183-mile direct-current cable, meaning it has almost no direct air emissions.