High oil prices and demand for gas are once again pumping up Norway’s vast offshore industry. New studies indicate that oil companies are boosting their investment in the North Sea, despite the global finance crisis.
State statistics bureau SSB predicts that the oil firms’ investments will rise both this year and next year. SSB notes that the amount of investment is substantial: as much as NOK 136 billion (more than USD 20 billion) next year, up 16 percent from this year.
SSB’s report, based on figures collected from oil companies at the end of May and early June, presents a more optimistic picture of the offshore industry prospects than a report by the central bank (Norges Bank) did in April. The bank reported lower activity at the time for offshore suppliers.
Oil prices have since gone up, though, and it’s also become easier to obtain both new capital and financing.
SSB’s report, released late last week, was “surprisingly good,” one local economist told business news site E24. Other analysts were also encouraged, as SSB said its prediction was based on reports from more oil companies than previous reports.
Investments in new oil field development may fall from 2009 to 2010, SSB wrote, but investments at oil fields already in production may rise as much as 15 percent. SSB predicted that the largest investments will be made on the Ekofisk, Troll, Valhall and Ormen Lange fields.
Gas production is also expected to rise, with newspaper Aftenposten predicting that Norway seems on the verge of becoming more of a gas nation than an oil nation. Gas now makes up 40 percent of Norway’s petroleum production and expectations are high that more gas fields will be discovered.
Drilling results from the Victoria field in the Norwegian Sea, about 300 kilometers off of Kristiansund, will soon determine whether it can be labelled as Norway’s largest undeveloped gas field. Several other fields are under development while still others are planned.