The budget price for Norwegian crude oil for 2004 is NOK 350 per barrel both for 2005 and 2006. Compared to the Revised National Budget (RNB) 2005 this is an upward adjustment of NOK 50 this year and NOK 65 next year.

The prognosis for petroleum production from the Norwegian continental shelf is adjusted downward in 2005 and 2006 with 3 and 6 percent respectively compared to RNB for 2005. The reduction is mainly due to lower oil production as a consequence of the gas leakage on the Snorre field in November 2004 and delayed drilling program on a number of other fields. It is expected that the reduction will be compensated by an increase in expected production in the period 2007-2010.

The average production of Norwegian crude oil (included NGL*) in 2005 is expected to be 3.0 million barrels per day, a little lower than in 2004. The oil production is expected to stay at this level in 2006 as well. Thereafter, the production is expected to increase over the next two years, and then gradually decline.

Production of gas for sale in 2005 is estimated to 81 billion standard cubic meters (scm). In 2006 the estimate is 86 billion scm. The gas sale is expected to increase in the coming years to a long-term level of 120 billion scm from 2010.

The state’s total net cash flow from the petroleum sector** is estimated to be NOK 283 billion this year and NOK 328 billion in 2006.

Investments are expected to be about NOK 90 billion both in 2005 and 2006, including investments in exploration. The high level of investment is to a large extent due to development of new fields such as Ormen Lange, Snøhvit, Alvheim and Kristin. Investments on existing fields like Ekofisk and Statfjord are also important contributors to the high investment level.

* NGL = Natural Gas Liquids
** The State's total net cash flow from the petroleum sector consists of taxes and fees, net cash flow from the State direct financial interest (SDFI) and dividends from Statoil ASA.