* Says cost inflation may lead to project cancellations
* Norway's oil and gas revenue NOK 124.8 bln in 2013
* Down from NOK 146.9 bln in 2012
* Petoro's output falls 9 pct to 1.034 mln boed in 2013
By Gwladys Fouche
OSLO, Feb 26 Norwegian oil firm Petoro said
rising production costs will force it to invest twice as much
money in the coming years than it did in the past just to keep
oil and gas output from falling.
State-owned Petoro, which has no operations of its own but
manages the Norwegian state's interests in offshore oil and gas
fields, said cost inflation could lead to the cancellation of
several developments in which it is involved.
Costs in Norway's oil industry roughly doubled between 2005
and 2012, which together with lower crude prices and a tax hike
last year has made the development of several oilfields a less
"Petoro's projections show that for the next few years
annual investments will be in the order of 40 billion Norwegian
crowns, or twice as high as in the period 2005-2011," the firm
said in a statement as it released its annual results for 2013.
"But the trend for oil production will remain limited to a
flattening of the decline that has taken place since 2001."
Higher costs and lower gas sales cut the Norwegian state's
revenue from oil and gas production to 124.8 billion crowns
($20.6 billion) in 2013 from 146.9 billion crowns in 2012,
Cost inflation has already led oil companies to cancel or
freeze several projects. Statoil has already put on
hold the development of its $15.5 billion Johan Castberg
oilfield in the Arctic.
On Thursday Petoro said another possible casualty could be
the installation of a new drilling platform at the Snorre field
in the North Sea, which could have facilitated the production of
an additional 240 million barrels of oil.
The choice of platform was supposed to be decided in the
first quarter of next year, followed by an investment decision
at a later time.
"We must work hard from now until the investment decision to
make the project more economically robust," Grethe Moen, the
head of Petoro, said in the statement.
The partners in the Snorre field include Statoil, ExxonMobil
, Idemitsu, Total, Core Energy and RWE
Petoro's oil and gas production reached 1.034 million
barrels of oil equivalent per day in 2013, down some 9 percent
from the 2012 level, the company said.
Petoro was due to publish its results for the fourth quarter
and for full-year 2013 on Thursday at 0900 GMT. It accidentally
published them on its website on Wednesday. A Petoro spokesman
said the statement was genuine.