London — Norway, Europe's largest oil producer, has joined international discussions on the "challenging" situation in oil markets and would be willing to participate in production cuts as part of a "broad" international effort, Petroleum and Energy Minister Tina Bru said Saturday.
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The announcement goes against years of convention in which North Sea producer states have avoided attempts to intervene directly in the market. Norway produced 2.1 million b/d of oil in February, roughly between 2 and 3% of global production, and around two thirds of North Sea oil production.
The North Sea is home to the Dated Brent benchmark, used in oil markets around the world.
"Due to the COVID-19 pandemic, the current situation in the oil market is challenging," Bru said. "The ministry is following the market development closely. As part of this effort we have a dialogue with key stakeholders, including other producing countries."
"If a broad group of producers agree to cut production significantly, Norway will consider a unilateral cut, if it supports our resource management and our economy," she said.
An effort by Russia, Saudi Arabia and the US to try to curb output levels appeared to falter over the weekend due to political tensions, putting in question a planned webinar meeting of the OPEC+ producer group scheduled for Monday.
Norway is the largest of the North Sea oil producers, and has reversed a decline in output with the launch of production from the Johan Sverdrup field last October. Johan Sverdrup is a heavier grade than conventional North Sea crude and has found favour with Chinese refineries. The UK, the second largest North Sea producer, has output of around 1.1 million b/d.
The Johan Sverdrup field is said by Norway's state-controlled Equinor to have a low operating cost of below $2/b, but much North Sea oil production is at the upper end of the scale in terms of production costs globally. Consultancy Wood Mackenzie estimates about a quarter of North Sea oil and gas production is loss-making in a $30/b oil price environment.
The UK's department for Business, Energy & Industrial Strategy did not immediately respond to a request for comment.