Norway oil investment projected at NOK 165.9 bn in 2016, pace of decline to slow in 2017

The second quarter oil investment survey showed that oil investment in Norway was NOK 195.3 billion last year. According to the survey, the oil investment will be NOK 165.9 billion in 2016 and NOK 153.2 billion in 2017. With no changes in the plans and price growth at zero, oil investment is anticipated to decline 15% in 2016 and 7% in 2017 in real terms. The Norwegian central bank projects a decline of 12% and 7% respectively.

For the year 2017, this is the initial investment plan and will probably be revised later. However, it differs if final investment will be higher or lower. Plans for 2016 were sharply revised lower because of extreme high projection for exploration in the first surveys. That might happen for 2017 as well, said Nordea Bank in a research report.

“We therefore base our forecast for 2017 on the survey. Our forecast is for real growth in oil investment”, added Nordea Bank.

Because of costs cuts, prices are declining; however, zero price growth is expected, consistent with the current scenario. Overall, the survey indicates that the decline in oil investment will decelerate in 2017, pointing to a recovery in mainland growth, noted Nordea Bank.