Investments in oil and gas offshore Norway are set to decline by 4.2 percent next year compared to 2020, a smaller drop than what the industry feared in early 2020, the Norwegian Oil and Gas Association said on Wednesday.
Next year, total investments in oil and gas development in the seas around Norway are expected to fall to US$20.5 billion (178.4 billion Norwegian crowns), down by 4.2 percent compared to the latest estimate by Statistics Norway for oil and gas investments in the country for 2020. However, the decline expected next year is now expected to be less severe than what was thought at the beginning of the pandemic-induced crisis, the Norwegian Oil and Gas Association, NOG, said.
A survey in April showed that the industry feared investments would halve by the end of 2022 compared to 2019 levels, the association said, noting that its first analysis after the beginning of the crisis shows that government measures to support the sector had worked.
Following the oil price collapse, Norway passed at the end of April measures to support the oil and gas industry and the supply chain, including by introducing temporary changes to the taxation system to help companies preserve liquidity and continue with their planned projects.
The mood in the industry is changing for the better, as many jobs have been saved and projects are being implemented, Anniken Hauglie, Director General of The Norwegian Oil and Gas Association, said in a statement accompanying the investment analysis today.
Most of the uncertainty from the spring has been removed, Hauglie added.
Between 2022 and 2024, oil investment in Norway will range between US$18.4 billion (160 billion crowns) and US$19.55 billion (170 billion crowns) each year, the association says.
Norway, Western Europe’s largest oil producer, will end government-imposed oil production cuts at the end of the year, the Ministry of Petroleum and Energy said earlier this month. Norway, which is not part of the OPEC+ coalition, is cutting its oil production in the second half of 2020 because of the slump in demand and prices in the spring of this year.