Norway, keeping in step with OPEC, will extend a 200,000 barrels per day (bpd) curb to oil output to the end of the first quarter of next year. Norway's Oil and Energy Ministry said it was extending the cuts beyond December 31 even though oil prices have more than doubled since late 1998. "Norway's oil production will be reduced by 200,000 barrels per day in the first quarter 2000," it said in a statement.
about 3.0 million bpd and is one of the world's top exporters behind Saudi Arabia. It first introduced a restriction of 100,000 bpd in May 1998 and doubled the cut to 200,000 bpd from April 1, 1999.
Both OPEC and non-OPEC oil producers implemented production curbs after oil prices fell to historic lows below $10 per barrel. Prices have since recovered back to around $25. Oil Minister Marit Arnstad said that the strong prices had largely reflected expectations of a tighter market rather than any actual supply shortfall.
"We would also like to see how the uncertainties affect the market, the seasonal demand and Iraqi exports," she said. "I think oil prices might go even higher."
"I also think that during the first half of 2000 there will be a need for both OPEC and independent producers to consider what is sustainable and a stable price level," Arnstad said.
"I do see a danger of prices going too high."
Some oil market observers have been skeptical of Norway's cuts, saying they were only paper measures since delays to new projects and technical problems at some fields had left it unable to meet forecast production for 1999.
Arnstad said that output in 1999 would be around 2.95 million bpd or "maybe even a bit lower," under the forecast of 2.99 million bpd including the reduction. "We cut from what is the best estimate we have of future production on the Continental shelf, that is the only way Norway can operate these cuts," she said.
State oil company Statoil (STO)
said there was "some flexibility" in the system. If output was less then expected at one field then another Could pump more.
Norsk Hydro, the second largest operator in Norway, also said it had not been necessary to restrict output at any of its fields.