Norwegian Shelf oil production is expected to decline slightly in 2019 but will then increase from 2020 to 2023 before approaching record highs reached in 2004, according to new projections released by the Norwegian Petroleum Directorate on Jan. 10.

The agency said total production of 1.49 million barrels per day in 2018 marked a larger-than-expected 6.3% decline from 1.59 MMbbl/d in 2017 as "certain newer fields are more complex than previously assumed, and certain other fields delivered below the forecast, mainly due to the fact that fewer wells have been drilled than expected." For 2019, the Norwegian Petroleum Directorate estimates that oil production will be reduced by an additional 4.7% to 1.42 MMbbl/d.

However, production is expected to show a substantial increase in 2020, as the start-up of new fields, including Johan Sverdrup, will more than offset the natural reduction from operating fields. By 2023, the NPD sees Norwegian Shelf oil production approaching 2.0 MMbbl/d.

"Production forecasts for the next few years are promising and lay a foundation for substantial revenues, both for the companies and the Norwegian society,” NPD Director General Bente Nyland said.

The directorate expects the number of exploration wells in 2019 will be about flat to the 53 spudded in 2018, which marked a big step up from 36 in 2017. In addition, 11 discoveries were made and a record high 87 new production licenses were awarded in 2018, the agency said.