BLBG:Norway Sees Record Oil Investments on Field Development
Norway expects the petroleum industry to invest a record amount next year amid new field developments after oil prices jumped over the past year.
The industry will make 172 billion kroner ($32 billion) in investments, a quarterly survey from the statistics agency showed today. This compares with a June estimate of 143.2 billion kroner. The industry expects to spend 151.7 billion kroner this year, up from a 144.4 billion-krone June estimate.
The nation’s petroleum industry, which accounts for about a quarter of the economy, has shielded the world’s seventh-largest oil exporter from the worst of the credit crisis and helped keep unemployment the lowest in Europe. Norway is also the world’s second-largest natural gas exporter.
Higher oil investments “will have a significant impact,” on the overall economy, Bjoern-Roger Wilhelmsen, an economist at First Securities said by phone. “It’s positive for the job market. We expect strong competition between oil and gas companies to attract employees. That will push up wages, which will contribute to higher consumption.”
New Developments
The krone strengthened 0.1 percent against the euro by 10:34 a.m. to trade at 7.7010.
Norway’s central bank on Aug. 10 scrapped a planned rate increase, leaving its benchmark rate unchanged at 2.25 percent. The bank cited the “recent flare-up” in financial markets and a risk of “weaker growth internationally.”
The increased estimates for 2011 and 2012 are mainly due to the inclusion of five new development projects in the survey, the agency said, adding that Ekofisk South, Eldfisk II, Valemon, Knarr and Hyme were approved by the authorities this year.
Petroleum producers are increasing spending after Brent crude oil prices surged 50 percent in the past 12 months.
Investments in exploration are estimated at 32.4 billion kroner in 2012, which is 2.5 billion kroner higher than previous estimates, the statistics agency said.
Statoil ASA has made two offshore finds of more than 250 million barrels of oil equivalent in Norway this year. The country’s biggest oil and gas producer last month said Aldous Major South and Avaldsnes in the North Sea are part of one “giant” oil field, and among Norway’s top 10 discoveries.
To contact the reporter on this story: Josiane Kremer in Oslo at Jkremer4@bloomberg.net
To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net
