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Norway’s Oil Investment Hits Record High
Investments in the oil and gas sector in Norway are set to hit a record high this year, due to higher development activity on new projects and the cost inflation in the industry, Statistics Norway said on Thursday in its fourth-quarter survey of companies’ investment plans.
Total investments in oil and gas activity, including pipeline transportation, are now estimated at $22.9 billion (256 billion Norwegian crowns) for this year, according to Norway’s statistics office. The estimate is an all-time high for oil and gas investments in the country, higher than the previous record of $20.4 billion (228 billion crowns) in 2014 when oil prices were high and companies were spending much more on projects.
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Apart from the cost inflation in the sector, the record-high investment levels this year are also attributed to the fact that the many development projects, which started in 2022, tend to have significantly higher activity in their second year than in their first year, Statistics Norway said.
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Increased exploration activity, pipeline transportation, and shutdown and removal this year also contribute to the growth in investments.
Investment is expected to be high next year, too, and is “mainly due to significant higher reported cost estimates on some development projects,” Norway’s statistics agency said.
Norway expects its oil liquids production to rise by 5.2% next year from 2024, while natural gas production is set to slightly drop by 1.6%, the Norwegian government said in its 2025 budget bill.
The rise in oil production is set to be driven by the new field Johan Castberg, which is expected to start up late this year, the government said.
“Oil and gas production is expected to remain relatively stable towards 2030,” according to the government.
Further exploration efforts and new discoveries would be crucial to slowing the expected decline in Norway’s oil and gas production in the 2030s, the authorities of Western Europe’s largest oil and gas producer have said in recent years.
By Charles Kennedy for Oilprice.com
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