USA – the world’s largest energy market

As a major consumer of oil and gas, the USA was one of the first places where Statoil opened a sales office. The company’s development into a big producer of oil and gas in North America has increased the significance of a bridgehead there over the years – eventually also for renewable energy sales.

By Kristin Øye Gjerde, Norwegian Petroleum Museum

- Head of Statoil’s company in New York, Kristoffer M. Marø, in front of their offices. Photo: Leif Berge/Equinor

The starting point was Statoil’s progress towards becoming the biggest oil producer on the Norwegian continental shelf (NCS). With both Statfjord and Gullfaks on stream, new markets had to be found for their output.

“Statoil in Manhattan – Kristoffer Marø heads for the USA to sell oil”, Facsimile: Status, 1987 No. 3

Although its own production was in decline, the USA ranked as the world’s largest oil market – good grounds for setting up shop across the Atlantic.

The company’s third sales office after Stavanger and London accordingly opened in Manhattan during June 1987. After Statoil’s Mongstad refinery became operational in 1988, the New York office could offer not only crude but also refined products and gas to the Americans.[REMOVE]Fotnote: Status, no 3, 9 March 1987, “Statoil på Manhattan”.

Oil sales

Five years later, in 1992, Statoil’s North America office moved to Stamford in Connecticut, just over the state border from New York, where costs were only a third of the Manhattan level. This subsidiary was by then the biggest Norwegian company in the USA, with an annual turnover of NOK 3 billion. Statoil sold 200 000 barrels of oil per day to American buyers that year – or 10 per cent of Norway’s oil production and almost 20 per cent of all the crude marketed by the company on its own and the Norwegian state’s behalf.[REMOVE]Fotnote: Statoil Magazine (print edition), no 1, vol 14, 1992.

In 1997, the US office had 30 employees and was selling roughly 600 000 barrels of crude and 55 000 barrels of refined products every day, mainly to the north-eastern states and eastern Canada.[REMOVE]Fotnote: Statoil Magazine, no 2, vol 19, 1997, “US oil trade celebrates”.

Following the merger between Statoil and Norsk Hydro’s oil and energy division in 2007, the company also planned to be able to deliver crude to the USA from fields in the Gulf of Mexico. In addition, it regarded its commitment to oil fields off Brazil and big oil sand reserves in Canada as relevant for future sales to the American market. And Statoil’s oil production in Venezuela was favourably placed to supply the USA.

Equinor in the USA today

Since then, Statoil/Equinor has produced oil both from US shale and Canadian oil sands on land and from offshore fields in both countries.

America accounted in 2018 for 19 per cent of Equinor’s total production.[REMOVE]Fotnote: Annual report, 2018, Equinor. Output on land was then almost twice as large as from offshore fields. Declining profitability and a poor reputation have prompted the company to sell out a great deal of its shale oil and gas projects in the USA and from all the oil sand fields in Canada. That means the North American sales office is marketing production mostly from offshore operations in that continent, along with as much oil and gas as Equinor produces elsewhere which can find buyers in the USA.