Oslo — Oil and gas companies working in Norway have hiked their 2019 and 2020 investment forecasts as they add more field development plans, a survey by the country’s statistics agency (SSB) showed on Tuesday.
Higher investment raises the prospect of further interest rate hikes by Norway’s central bank, economists said, as the data helped lift the crown to an almost four-week high against the euro.
Investments are now seen at a four-year high of 183.7 billion Norwegian crowns ($21.11 billion) in 2019, up from the 172.7 billion crowns seen in February, according to SSB, which collects the data from oil firms.
“The oil companies’ latest estimates for 2019 suggest an increase of as much as 17% compared with the corresponding figure for 2018,” the agency said in a statement.
“This growth is considerably higher than indicated in the previous survey, which showed a 7.9% increase,” it added.
The Norwegian central bank in March said it expected investment in the oil sector, the country’s most important industry, to grow by 12.5% in 2019.
“It’s clearly a lot stronger than anticipated by Norges Bank, and more than we expected,” Nordea Markets economist Lars Mouland said of the new forecast.
While Nordea still forecasts two more rate hikes from the central bank this year, in June and September, the latest data could ultimately trigger a third hike later in the year, he added.
In 2020, investments are projected to be 172.4 billion crowns, higher than the 158.5 billion seen three months ago and subject to potential upward revision in the months to come, SSB said.
After falling by a third from 2014 to 2017, Norway’s oil and gas investments rose 2% year-on-year in 2018 to 151.8 billion crowns as rising crude prices boosted activity.
The crown was at 9.7213 to the euro at 0702 GMT, from 9.7334 shortly ahead of the 0600 GMT release.
Equinor is Norway’s largest oil company, competing with Aker BP, Lundin Petroleum, Total , ConocoPhillips, ENI and Shell , among others.
Key suppliers to the industry, which rely heavily on oil firms’ investment plans, include Aker Solutions, Subsea 7, Kvaerner and TGS.