Norway oil investments set to grow more slowly in 2014


Norway oil investments set to grow more slowly in 2014


OSLO -- Growth in Norway's oil and gas sector investments is expected to slow to around 1% next year, from more than 15% annual growth since 2010, according to an official survey.

Oil companies expect 2013 oil and gas investments to be 212.8 billion Norwegian kroner ($35.1 billion), according to Statistics Norway's third-quarter survey, or 23.4% more than the year earlier.

Companies expect to invest NOK215.1 billion in 2014, Statistics Norway said, the highest figure ever but a more moderate growth than in the previous years.

The 2013 estimate is slightly higher than forecast in the previous quarter, the agency said, mainly due to bigger investments in the development of new fields and maintenance of existing fields and pipelines.

Oil companies operating in Norway expect to spend less on exploration in 2014, the agency said, which is surprising because rig capacity is growing. Statistics Norway said companies would likely drill fewer exploration and appraisal wells due to the record-high drilling activity needed to maintain output in existing fields.

The estimate isn't expected to have a great effect on the markets but is closely watched since the oil sector's capital expenditure has been a key source of Norway's exceptional growth and low unemployment. In 2011, Norway's gross domestic product per capita was 86% higher than the European Union average.

Oil and gas investments in Norway grew 220% from 2002 to 2012 on the back of huge projects such as Ormen Lange and Snohvit, as well as higher energy prices and ballooning costs in the oil field service industry due to capacity constraints.

The quarterly petroleum investment statistics are based on estimates submitted by oil and gas companies operating offshore Norway.

Most of the 2014 investments will be spent on maintaining the output in currently producing fields, estimated at NOK100.1 billion, compared with NOK70.2 billion which will be used to develop new fields and NOK32.8 billion that will be used on exploration, the agency said.

The biggest investments in 2013 are expected in giant fields such as the Statoil ASA-operated Troll and Oseberg, and the ConocoPhilips-operated Ekofisk field, Norway's oldest oil discovery.

Some of the most expensive new fields to come on stream in the coming years are the Eni SpA-operated Barents Sea field Goliat, the ConocoPhilips-operated Eldfisk II, and the Lundin Petroleum AB-operated Edvard Grieg field.

Dow Jones Newswires

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