Norway has a small coal sector, producing only 3.2 million short tons (Mmst) and consuming just 1.5 Mmst in 2004. State-owned Store Norske Spitsbergen Kulkompani controls the sector, which includes two production facilities in the Svalbard Islands (Spitsbergen and Svea Nord). Much of the coal mined fuels a coal-fired power plant there, the only such facility in Norway. In 2004, Norway generated 108.9 billion kilowatthours (Bkwh) of electricity while consuming 112.8 Bkwh. Almost all of Norways electricity generation comes from hydroelectric facilities. Norways peak electricity usage occurs in the winter, as many rely upon electricity for climate control and heating water. Norway has fully deregulated its electricity sector, and there is free and open access to the sector. However, state-owned actors still play an important role, as many generating and distribution companies are partially or wholly state-owned. The largest power producer in Norway is Statkraft, which controls about one-third of total generating capacity. Regional companies control most of the rest, though Statkraft has begun to acquire many of these in order to increase its market share. State-owned Statnett owns and operates Norways national electricity transmission network and international interconnections. Small, local companies control most of the electricity distribution market, with these companies also controlling their respective local electricity grids. Norway is also a member of Nordel, the Nordic power exchange. Nordel is an integrated electricity market consisting of Norway, Sweden, Finland, and Denmark, featuring a spot market, financial markets for hedging and risk management, and an information clearinghouse.
Gassco owns and operates most of the domestic and export pipelines in Norway, as well as onshore receiving facilities. The domestic pipeline network consists of numerous subsea systems that bring offshore production ashore for further processing. The Asgard Transport System (ATS) links the Asgard and numerous nearby fields in the Norwegian sea to the receiving terminal at Karsto; the 42-inch, 440-mile ATS has a capacity of 706 Bcf/y. The Karsto facility also receives natural gas via the Statpipe system, which brings 320-Bcf/y ashore from the Statfjord area; an outbound extension of the Statpipe carries gas from the Karsto terminal to an interface with the Norpipe near the Ekofisk platform. The 80-Bcf/y Haltenpipe connects the Heudrum field with a gas receiving terminal and methanol plant at Tjeldbergodden. The system connecting the Kollsnes processing facility with the Troll and Kvitebjorn fields has a maximum capacity of 4.2 Bcf/d.
According to OGJ, Norway had 84.3 trillion cubic feet (Tcf) of proven natural gas reserves as of January 2006. The North Sea holds the majority of these 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 2.95 Tcf in 2004. However, because of the countrys low domestic consumption, which totaled only 290 billion cubic feet (Bcf) in 2004, Norway was the worlds third-largest net exporter of natural gas in 2004, behind Russia and Canada. As is the case with the oil sector, Statoil and Norsk Hydro dominate natural gas production in Norway. Several international majors, such as ExxonMobil and BP, also have a sizable presence in the NCS gas sector, though they often work in partnership with Statoil or Norsk Hydro. Norway has begun to slowly reform the midstream and downstream gas sectors. In June 2001, the Norwegian government eliminated controls on natural gas prices. Also in 2001, the government created Gassco, a state-owned company responsible for administering the natural gas pipeline network. Previously, Statoil and Norsk Hydro had controlled the network; it is hoped that placing control of the system with an independent company will ensure fair, indiscriminate access for all companies. The company also manages Gassled, the network of pipelines and receiving terminals that exports Norways natural gas production to the United Kingdom and continental Europe.
There is a great emphasis on increasing production from existing projects, including the incorporation of smaller satellite fields. This allows companies to take advantage of existing infrastructure and utilize processing capacity that has been freed-up by declining production at main fields. Statoil, for example, brought the Urd field online in November 2005, a project that incorporated two satellite fields (Svale and Staer) of its existing Norne project. In June 2006, Statoil announced that it had made oil discoveries in the Valemon and Morvin exploratory areas, which are, respectively, satellites of the companys existing Kvitebjorn and Kristin platforms. In February 2006, the Norwegian Parliament approved plans by Statoil to develop the Tyrihans field, containing an estimated 180 million barrels of recoverable reserves. Statoil will develop Tyrihans by using existing facilities at the Kirstin platform. The company is also developing satellite wells at the Asgard field.
According to Oil and Gas Journal (OGJ), Norway had 7.7 billion barrels of proven oil reserves as of January 2006, the largest in Western Europe. All of Norways oil reserves are located offshore on the Norwegian Continental Shelf (NCS), which is divided into three sections: the North Sea, the Norwegian Sea and the Barents Sea. The bulk of Norways oil production occurs in the North Sea, with smaller amounts in the Norwegian Sea. There is no current production and little exploration activity in the Barents Sea, but it is believed that the Barents Sea could contain sizable oil and gas reserves.Because Norway only consumed 228,000 bbl/d in 2005, the country is able to export the vast majority of its oil production. In 2005, Norway was the third-largest net oil exporter in the world, behind Saudi Arabia and Russia. The Norwegian government holds a dominant stake in the oil sector. Statoil, 71 percent-owned by the government, controls over 60 percent of Norways oil and gas production. The Norwegian government also holds a 44 percent stake in Norsk Hydro, an aluminum and energy company. Along with shares in these production companies, the Norwegian government has direct ownership over part of the countrys oil production through the State Direct Financial Interest (SDFI). State-owned Petoro administers these ownership interests, while Statoil is responsible for managing actual production from SDFI assets. International oil majors do have a sizable presence in the NCS, but they must act in partnership with Statoil. The largest private oil producers in Norway are ConocoPhillips, ExxonMobil, and BP.
Norway is a major non-OPEC source of oil. It is a major world supplier of oil and natural gas, especially to the European Union. Norway is an advanced, highly-developed economy that has greatly benefited from the utilization of its hydrocarbon resources. The Norwegian government holds a dominant stake in the oil sector. Statoil, 71 percent-owned by the government, controls over 60 percent of Norways oil and gas production. All of Norways oil reserves are located offshore on the Norwegian Continental Shelf (NCS), which is divided into three sections: the North Sea, the Norwegian Sea and the Barents Sea. Norways largest oil field in Norway is Ecofisk, operated by ConocoPhillips, which produced 280,000 bbl/d in Jan-May 2006. A potential source of new oil production is the Barents Sea, which could contain large quantities of oil reserves. Norway had 310,000 bbl/d of crude oil refining capacity in 2006. The country has two major refining facilities: the 110,000-bbl/d Slagen plant, operated by ExxonMobil, and the 200,000-bbl/d Mongstad, operated by Statoil. Norway is the second-largest supplier of natural gas to continental Europe. A small group of fields account for the bulk of Norways total natural gas production. The single largest field is Troll, which produced 3.11 Bcf per day (Bcf/d) during the first half of 2006 and represents about one-third of Norways total natural gas production. Norway has worked with Russia to jointly develop the giant Shtokman natural gas field and pursue other oil and gas projects in the area. Norway operates numerous natural gas pipeline connects with the rest of Europe. Norway has little coal production or consumption. Almost all of Norways electricity supply comes from hydroelectric generation.