Oslo — Oil and gas firms in Norway have increased their 2021 investment plans in recent months, but still plan to spend less than last year and to reduce spending in 2022, a national statistics office (SSB) survey showed on Wednesday.
The biggest sector in Norway now expects to invest 173.6 billion Norwegian crowns ($20.5 billion) this year, up from a forecast of 166.3 billion in November, the SSB said, but that still lags last year’s 179.3 billion.
Its initial forecast for 2022 stood at 138 billion, some 8.9% lower than predictions for 2021 a year ago, SSB said.
Investment levels have an impact on both the near-term growth of Norway’s economy as well as the country’s longer-term output of petroleum.
Last year, Norway’s parliament approved temporary tax incentives to spur oil and gas investments, triggering promises by Equinor and others to accelerate development of existing finds to bring them on stream.
To qualify for the incentives, which could reduce development costs by around $10 per barrel of oil according to industry estimates, projects need to be approved by the end of 2022.
“The indicated decrease in 2022 is mainly due to low estimates in field development … The decline is related to more developments being completed in 2021 or early in 2022,” SSB said in a statement.
A string of new development plans are expected this year and next, but major investments associated with them tend to come only as construction of platforms and pipelines gets underway.
As the vast majority plan to start up late next year, the SSB noted these will involve relatively low investment in 2022.
$1 = 8.4731 Norwegian crowns
(Reporting by Terje Solsvik; editing by Nora Buli and Jason Neely)