Oil and gas companies in Norway have increased their 2021 investment plans in recent months, but still plan to spend less than last year and to reduce spending in 2022, the national statistics office (SSB) survey said.
SSB said on Wednesday that investments in the oil and gas industry of Norway for 2022 were estimated at $16.3 billion. This is 8.9 per cent lower than the estimate given for 2021 in the first quarter of 2020.
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The indicated decrease in 2022 is mainly due to low estimates in field development. The estimate in field development is 14 per cent lower than the corresponding estimate for 2021. The decline is related to more developments being completed in 2021 or early in 2022.
Some plans for development and operation (PDOs) are expected to be submitted to the government during 2021. Among these are Kristin South, Frosk , Kobra East/ Gekko , and Tommeliten Alpha .
Furthermore, it is also expected that PDOs will be delivered on many projects by next year. This is most likely related to a tax measures package Norway adopted in June last year . The measures provide favourable taxation for all development investments with PDOs submitted before 1 January 2023.
Since investments in projects tend to be modest in the first year of development. Most of these projects are planned to start up in late 2022 so there will be a relatively low level of investments in 2022.
SSB added that total investments in Norway’s oil and gas activity in 2021 were estimated at $20.5 billion. This is 4.4 per cent higher than estimated in the previous quarter.
The increase for this category is partly due to shifts in investments from 2020 to 2021 on some projects. Also, some investments that were previously planned to be made in 2022 have now been accelerated to 2021. The accelerated investment plans from 2022 to 2021 may also be related to government tax measures.
Total investments in oil and gas for 2020 were $21.2 billion. This is only one per cent higher than final investments in 2019. It was increased investments in the categories of fields on streams and shutdown and removal that contributed to growth last year, while lower investments in exploration and field development contributed to curbing growth.
According to preliminary figures from SSB, investment prices in the industry increased by 6.1 per cent from 2019 to 2020. Although this survey shows a small investment growth in current value, the real investment activity has fallen from 2019 to 2020.
SSB reminded that oil companies were affected by the corona pandemic from early March 2020 directly through Norwegian infection control measures and indirectly through global corona measures leading to a sharp fall in oil prices.
Infection control measures and outbreaks on some rigs and platforms contributed to a seasonally adjusted fall in investments of 8.6 per cent from the first quarter to the second quarter.
The final investments in the fourth quarter of 2020 came to $5.5 billion. This is 6.4 per cent lower than estimated in the previous quarter, but 8.1 per cent higher than the investments in the third quarter, unadjusted. The seasonally adjusted increase from the third quarter to the fourth quarter was 4.1 per cent.
about 5 years ago
Oil and gas companies in Norway have increased their 2021 investment plans in recent months, but still plan to spend less than last year and to reduce spending in 2022, the national statistics office (SSB) survey said.
