Norway Boosts Investment Estimates in Oil, Gas

Norway’s total investment in oil and gas activity was estimated at $23.91 billion (NOK 257 billion) as of August 15, 4.1 percent higher than estimated in the previous quarter, according to the Norwegian statistics bureau Statistics Norway.

The total investment includes figures for pipeline transportation, the government agency said in a news release.

Statistics Norway said that the increase is mainly driven by higher cost estimates in production drilling within fields onstream. The oil companies' investment estimates for this year are also 21 percent higher than the corresponding estimate given in the third quarter of 2023.

Investments for 2025 are now estimated to be $22.33 billion (NOK 240 billion), which is 11 percent more than estimated in the previous survey in May. The increase of 16 percent is largely driven by higher estimates within the categories for fields onstream and field development. The increase was marked in the categories of fields onstream, field development, pipeline transportation and shutdown and removal. Meanwhile, estimates for exploration and onshore activities are decreasing.

Investments in oil and gas extraction and pipeline transport for 2024 are now estimated at $23.91 billion (NOK 257 billion), which is historically the highest nominal estimate given since the statistic was created, as well as 4.1 percent higher compared to the previous survey, the agency reported.

Statistics Norway noted that many field developments that started towards the end of 2022 are now in their second full year, adding that activity increases sharply during the first year and often reaches a peak in the second or third year of development.

The investment estimate for production drilling in fields on stream has increased by as much as 24 percent. Several drilling plans in connection with the budget update this summer may have been triggered by persistently high oil prices, the agency said.

The estimate for investments in pipeline transportation and extraction of oil and gas for 2025 increased 16 percent higher compared to the corresponding estimate for 2024 given in the third quarter of last year.

Further, first-half investment for the year increased 23 percent compared to the same period in 2023. The agency said it assumed an investment of $12.84 billion (NOK 138 billion) for the second half representing an increase of about 16 percent.

The agency added that the increase for the second half will mainly be driven by increased planned activity in fields onstream, including production drilling. “High oil prices nevertheless provide strong incentives to implement plans for higher activity in production drilling,” it noted.

Norway produced 122.9 million cubic meters (4.3 billion cubic feet) of oil equivalent in the first half of 2024, up 6.2 MMcm (219 MMcf) compared to the same period last year, according to data released by the Norwegian Offshore Directorate.

June’s daily average for gas production exceeded the government forecast by 6.5 percent. The figure last month rose from 252.6 MMcmpd (8.9 Bcfpd) in June 2023 and 322.2 MMcmpd (11.4 Bcfpd) in the prior month.

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