Statoil/Norsk Hydro Wait Until Last Minute To Close Taps

Statoil and Norsk Hydro have delayed turning off the taps until the last possible moment to comply with OPEC production cuts. "As far as we can see now, we will have to cut production at some fields due to the government's output restrictions," Statoil spokesman Kjell Varlo Larsen said in a statement. He said Statoil would reduce output at its Statfjord East, Glitne and Norne oilfields, but declined to specify how much would be cut and for how long.

Norsk Hydro said it was cutting output at the Troll B and C oilfields and would shut Brage and Visund to the end of June. "In order to meet the goal, we have to reduce a little bit here and a little bit there, but we are sticking to our promised production levels," Norsk Hydro spokeswoman Hege Norheim said. Oslo's restrictions have been imposed on a quarterly basis, meaning oil companies have waited until the end of each quarter before trimming output -- in some cases forcing them to shut down oilfields completely to meet the curbs.

Norway, the world's third top oil exporter after Russia and Saudi-Arabia, had committed to reduce oil output by an average 150,000 barrels of oil per day for six months until the end of June to an average 3.02 million bpd. April's output was above that goal at 3.16 million bpd as many firms have waited until the last days to cut, fearing that technical problems or storms closures would put them below quota if they opted for even flow throughout the period. Output was just below 3.02 million bpd in the first quarter -- in line with Oslo's commitment -- after oil companies produced at full speed for the first two months and slashed production in March to 2.83 million. The Norwegian Oil Minister has said that Norway will not continue with the production curbs into the third quarter.

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