Published on 03/28/2006

Two countries, Norway and the Netherlands, account for over three-fourths of these reserves. On the other hand, the United Kingdom is the largest producer. The North Sea region is an important source of natural gas for Europe, second only to Russia in total exports to the European Union (EU). Natural gas production in the region has increased dramatically since the early 1980s, with a 2003 production level of 9.9 Tcf that was 56 percent above the 1980 level.

The North Sea region is the second-largest supplier of natural gas

According to OGJ, the five countries in the North Sea region had combined, proven natural gas reserves of 169.8 trillion cubic feet (Tcf). Two countries, Norway and the Netherlands, account for over three-fourths of these reserves. On the other hand, the United Kingdom is the largest producer. The North Sea region is an important source of natural gas for Europe, second only to Russia in total exports to the European Union (EU). Natural gas production in the region has increased dramatically since the early 1980s, with a 2003 production level of 9.9 Tcf that was 56 percent above the 1980 level. However, regional natural gas production has begun to flatten, with only Norway adding any significant new capacity in recent years.

The North Sea holds the majority of Norway's natural gas reserves, but there are also significant quantities in the Norwegian and Barents Seas. Norway is the eighth-largest natural gas producer in the world, producing 2.59 Tcf in 2003. However, because of the country's low domestic consumption, Norway was the world's third-largest net exporter of natural gas in 2003, behind Russia and Canada.

A small group of fields account for the bulk of Norway's total natural gas production. The single largest field is Troll, which produced 930 billion cubic feet (Bcf) in 2004 and represents about one-third of Norway's total natural gas production. Other important fields include Sleipner Ost (450 Bcf), Asgard (360 Bcf), and Oseberg

North Sea natural gas production

Despite the maturation of its major natural gas fields in the North Sea, Norway has been able to sustain annual increases in total natural gas production by incorporating new fields. In October 2004, the Kvitebjorn field came onstream with an expected production level of 710 million cubic feet per day (Mmcf/d).

Statoil expects to bring the Halten Bank West project onstream in October 2005, which includes estimated reserves of 1.2 Tcf spread among five fields (Kristin, Lavrans, Erlend, Morvin, and Ragnfrid). Over the long term, Norway is counting on non-North Sea projects to provide significant natural gas production, such as Ormen Lange (Norwegian Sea) and Snohvit (Barents Sea).

Most UK natural gas reserves occur in three distinct areas: 1) associated fields in the UKCS; 2) non-associated fields in the Southern Gas Basin, located adjacent to the Dutch sector of the North Sea; and 3) non-associated fields in the Irish Sea. Since 1997, the UK has been a net exporter of natural gas.

However, as is the case with the country's oil reserves, most natural gas fields have already reached a high degree of maturity, and the UK government estimates that the country will again become a net importer of natural gas by the end of the decade. Indicative of this trend, the operators of the Interconnector natural gas pipeline linking the UK and Belgium announced in August 2005 that they would change the flow of the system, exporting gas from the Continent to the UK, rather than importing gas from the UK. In addition, the UK received in 2005 its first shipment of LNG in three decades.

The UK produced 3.6 Tcf of natural gas in 2003, a decrease from the peak of 3.8 Tcf in 2000. The country is the fourth-largest producer of natural gas in the world, behind Russia, the United States, and Canada. The largest concentration of natural gas production in the UK is the Shearwater-Elgin area of the Southern Gas Basin.

The area contains five non-associated gas fields, Elgin (Total), Franklin (Total), Halley (Talisman), Scoter (Shell), and Shearwater (Shell). The UK also produces signifigant amounts of associated natural gas from its oil fields in the UKCS. Like the oil industry, smaller independents have been able to acquire some maturing assets from larger operators, who find it difficult to profitably operate these older, declining fields.

Danish natural gas production has steadily increased over the last three decades, reaching 280 Bcf in 2003. More than a quarter of the country's production is re-injected to boost oil production, according to the Danish Energy Authority (DEA).

In 2003, natural gas production in the Netherlands was 2.6 Tcf. Natural gas production in the country has declined, not due to natural factors, but rather government policy. The Netherlands has passed the Natural Gas Law, which caps natural gas production at 2.68 Tcf per year between 2003-2007, with this ceiling dropping to 2.47 Tcf between 2008-2013. The government made this policy decision to cut back production in order to maintain reserves for future use. According to the Dutch Ministry of Economic Affairs, Dutch natural gas production will continue to remain steady or slightly decline through 2014.

The onshore Groningen field, located in the north-east of the country, accounts for about one-half of total Dutch natural gas production, with remaining production spread across small fields both onshore and in the North Sea. The largest offshore field is K15. Nederlandse Aarodolie Maatschappij (NAM), a consortium of ExxonMobil and Royal Dutch Shell, operates both K15 and the Groningen field.

Germany produced 785 Bcf of natural gas in 2003. Nearly all of Germany's natural gas production is located onshore. The country does have one offshore natural gas field, A6-B4, located in the German sector of North Sea, which began production in 2000. The largest natural gas producer in Germany is BEB, a consortium of Royal Dutch Shell and ExxonMobil, which controls half of the country's domestic natural gas production.

Source: Energy Information Administration