The Scandinavian country should produce around 1.6 million barrels of oil per day (mb/d) this year, compared with 1.7 mb/d in 2011 and 1.8 mb/d in 2010.
Natural gas, which accounts for a growing share of Norway's energy production, also saw output slip last year by 5.0 percent to 101.3 billion cubic metres, but the Petroleum Directorate said the decline was largely market-driven.
"Gas sales are expected to rise in the next few years," it pointed out in a statement.
Since its peak in 2001, Norwegian oil production has gradually shrunk as new discoveries have failed to replenish dwindling reserves, and it now stands at less than half the level of output seen a decade ago.
Natural gas is expected to account for 50 percent of Norway's total petroleum-based production by 2016, up from 46 percent last year, according to the Petroleum Directorate.