Norway investment to fall in 2017

OE Staff
Thursday, October 8, 2015

The Norwegian government has said it expects oil and gas investments to fall nearly 21% by 2017, from a record high last year, in its 2016 budget, budget outlined 7 October. 

With prices expected to remain low in the short-term, the pain is set to continue for the country, which is heavily reliant on oil revenues as a source of funding. 

In a summary of the 2016 budget, the government said: "If the oil price remains low, a number of investment projects may be changed, postponed or cancelled."

But, it also stressed that activity was continuing, not least with the giant Johan Sverdrup project: "There will, at the same time, still be awarded contracts for development projects that

remain profitable at a low oil price, such as the Johan Sverdrup field. Further petroleum investment decline is anticipated for the next two years, but such decline is likely to be less than this year."

Norway, like other basins, has struggled with increasing costs and delays, as, amid record spending, firms' capacities have been pushed to the limits.  

Troubles seem to be continuing. The budget announcement yesterday suggested the Total's Martin Linge project would now cost about 14% more than the NOK 30.5 billion predicted last year - 26% more than the initial estimate, reports Reuters.

Statoil's Aasta Hansteen field offshore Norway is also delayed, with first production post-poned to 2018, from Q3 2017, due to delays in construction of the production platform - a SPAR facility being built by Hyundai Heavy Industries in South Korea.

Categories: North Sea Government

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