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* Norway to boost oil output despite climate concerns
* Equinor says oil production supports renewable investments
* Oil industry's suppliers adapting to green shift
By Nerijus Adomaitis
JOHAN SVERDRUP OILFIELD, North Sea, Dec 5 (Reuters) -
N orwegian oil worker Nils Magne Lunde is preparing to drill a
well at Johan Sverdrup, a North Sea offshore field which started
in October and has quickly become Western Europe's biggest oil
producer with rapidly rising output.
Lunde views the prospects of his industry with caution.
"I might retire in this industry, but I would not recommend
it to my son, who is 15," he said, watching the waves crash
against the pipes pumping crude from a reservoir 1.9 kilometres
(1.2 miles) below the seabed.
Doubts about the future of Norway's main industry are
mounting. Norway has not discovered any major new oil deposits
and green groups and young politicians are increasingly calling
for production to be curbed or even a shut down due to climate
change.
But Equinor, Norway's state-controlled oil company
and Sverdrup's operator, proudly states how oil will play a
critical role in its future, even as global leaders debate how
to stop the global warming caused by fossil fuels.
"Some people are saying we should stop producing oil
altogether, for the sake of the climate. But we believe Johan
Sverdrup is a prime example of exactly why we shouldn't do
that," the company said.
The oilfield has an estimated 50 year life span, and drew 83
billion Norwegian crowns ($9 billion) of investment in phase 1
development. Phase 2 will require 41 billion Norwegian crowns
($4.48 billion) -- hardly figures that suggest an industry on
its last legs.
"World energy demand continues to rise, and we will still
have a significant need for oil and gas in the foreseeable
future," Equinor said.
"But not all barrels are created equal," it adds.
Johan Sverdrup shows how technology can help extract oil
more cleanly and why "Norwegian oil and gas are important in a
climate perspective," the company said.
Sverdrup gets all electricity via an 160-km undersea power
cable connecting it Norway's hydropower dams. In that way, the
field's carbon emissions are reduced to 0.67 kg per barrel
compared with the industry's average of 18 kg.
Nonetheless, Norway, which meets some 2% of global oil
demand and is Europe's second-largest gas supplier after Russia,
is trying to boost its renewable production.
Equinor aims to use about 15-20% of its capital spending on
renewable energy projects by 2030, focusing on offshore wind.
Its current projects include 3,600-megawatt (MW) offshore
wind farm Dogger Bank in Britain and the 800-MW Empire Wind farm
off New York.
"It is capital, technology and competence generated from oil
and gas that enables us to excel in offshore wind," Equinor's
Chief Executive Elder Saetre told a conference in November.
"Without Johan Sverdrup, there would be no Dogger Bank."
Environmentalists, however, give short shrift to that
argument, common within the oil industry.
" Johan Sverdrup startup means that there will be more
oil and gas to be burned, and we cannot afford that because of
climate change. The world needs to reduce emissions to zero by
2050, and Equinor developing new fields simply doesn't add up to
that," said Frode Pleym, head of Greenpeace Norway.
Swedish teen activist Greta Thunberg refused to accept a
prize from the Nordic Council, a body of Nordic governments,
partly because of Norway's backing for Johan Sverdrup.
GREEN SHIFT
Equinor's suppliers in Norway are also increasingly catering
to the renewables industry. Dusavik port owner NorSea Group
wants to build a logistics chain to supply onshore and offshore
wind power worldwide, predicting huge growth.
"We as a company take responsibility to contribute to the
green shift, while at the same time we need to look for business
opportunities, and to combine both in a good manner," said Knut
Magne Johannessen, a senior advisor at NorSea Group.
"That exercise is going on in the entire oil and gas
industry in Norway."
Norway's Kvaerner, which build Sverdrup, has won
Equinor's $1.5 billion crowns contract to supply concrete hulls
for offshore wind power turbines.
Although green campaigners and many younger people would
like Norway to phase out oil production and stop exploration in
the fragile Arctic, the country is not about to abandon the
industry which has made it one of the world's richest states.
The sector employs 139,500 people in a population of 5.4
million and produces 17% of GDP. Oil and gas sales from the
Norwegian continental shelf account for about a fifth of state
revenues and 40% of exports.
"We think that the world needs oil and gas, in combination
with renewables, for many decades to come," said Arne Sigve
Nylund, Equinor's head of Norwegian production.
($1 = 9.1609 Norwegian crowns)
(Editing by Alexandra Hudson)
