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Oil and gas investments on the Norwegian Continental Shelf are expected to drop for a fourth consecutive year in 2018, albeit at a slower pace than predicted earlier, according to industry group Norwegian Oil and Gas Association.
Investments in Norway’s oil and gas industry will drop to US$17 billion (143.3 billion Norwegian crowns) in 2018, from US$18 billion (151 billion crowns) expected this year, figures by the industry association showed on Tuesday.
The 2018 drop currently expected will be smaller than the lobby group had predicted a year ago—last year the association had expected next year’s investments to be US$15.6 billion (131 billion crowns), based on an oil price of $50 a barrel.
After 2018, investments are expected to tick up, to reach US$18.3 billion (153 billion crowns) in 2019, and US$19 billion (159.4 billion crowns) in 2020, before dropping off again in 2021 and 2022.
Between 2019 and 2022, two large fields, Johan Sverdrup in the North Sea and Johan Castberg in the Barents Sea, are expected to start operations—in 2019 and 2022, respectively. Norway’s oil major Statoil last week submitted to authorities the plan for developing and operating the Johan Castberg oil field that is expected to take capital expenditures of US$5.89 billion (49 billion Norwegian crowns) and become the northernmost oil field development on the Norwegian Continental Shelf.
Norway’s oil industry and authorities have been warning that unless new discoveries are made, Norwegian oil production faces a steep decline from the early 2020s onwards.
After the oil price crash in 2014, investments in the Norwegian petroleum industry in 2015 and 2016 dropped because companies cut costs, postponed some new projects, and completed major projects. The trends of declining investment levels are expected to level off in the coming years, Norway’s oil industry authorities say.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.