Norway Oil Association Sees O&G Investment Peaking in 2014
OSLO - Norwegian Oil and Gas said Thursday it expects domestic oil and gas investment to peak in 2014 at 212 billion Norwegian kronor ($36.8 billion) and to stay around those levels until 2017, while Norway's total oil and gas output remains about flat.
In recent years, Norway's oil sector has experienced an investment boom on the back of higher oil prices. Ten years ago, total investment was NOK54 billion.
"The activity level on the Norwegian shelf will be high and increasing in the coming years," said Norwegian Oil and Gas Chief Executive Gro Braekken. "New fields will be developed and existing installations will be maintained and upgraded."
The association, which organizes companies in the petroleum sector, expected total investments offshore Norway at NOK184 billion in 2012, NOK199 billion in 2013 and NOK212 billion in 2014. It is then forecast to stay about flat until 2017, when investments are expected to be NOK205 billion.
Today, nearly half of the annual investments are required to maintain the production in existing fields, but an increasing share will be used to develop new fields, the association said.
In 2017, new fields will require 44% of total investments, from 27% in 2012. The percentage of investments into existing fields is expected to fall to 32% in 2017 from 54% in 2012, the association said.
"Big discoveries so far this year shows that there are significant resources left in mature areas in the North Sea and Norwegian Sea," said Ms. Braekken. "Meanwhile, we see that the Barents Sea is and will be a more important area for the industry."
Norway's crude oil production has fallen to 1.68 million barrels a day in 2011, from a peak in 2000 at 3.12 million barrels a day. The country's natural gas production was 1.75 million barrels a day in 2011, up from 858,000 barrels a day in 2000.
To counter a fall in Norway's total petroleum output since 2004, the country has to increase oil recovery in old fields, develop new fields and carry out more exploration, often in new areas, the association said.
"Opening one of the most promising areas on the Norwegian shelf, the areas outside Lofoten, Vesteralen and Senja, can secure a high activity level for oil companies and suppliers also after 2020," said Ms. Braekken.
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