Navigating Norway’s cut

The non-Opec nation’s decision to join in mandated production restrictions is headline grabbing. But the material impact is open to question

Norway’s late April decision that it would be joining the ranks of oil producing countries imposing output cuts is eye-catching due to its novelty. But, while thinking about the Scandinavian nation in an Opec quota style context is new, a key variable—the baseline from which the cuts are calculated—is reassuringly familiar. The figures put out by the Norwegian ministry of petroleum and energy (MPE) were clear enough—a 250,000bl/d cut in June and a 134,000bl/d cut for the second half of the year. But a cut from what?  The reference case, says the ministry is 1.859mn bl/d. So, a cut of 250,000bl/d in June means maximum Norwegian continental shelf (NCS) oil production of 1.609mn bl/d, while t