Optimistic about the near-term future of the oil industry, Norwegian oil companies have upped their investment plans for 2017 over the past three months, according to a survey conducted by the national statistics office.
The results of the survey, released on Thursday, show that the total number of oil and gas extraction and transport projects is expected to fall for the third year in a row because energy majors slashed expenditures by over 50 percent since the oil price crisis began in 2014.
This year the extraction and pipeline sectors will benefit from $17.87 billion in new spending - down significantly from the 2016 figure of $19.58 billion, but still greater than the industry's previous estimates for 2017.
"The increase is mainly due to higher estimates for field development, fields on stream and shutdown and removal," Statistics Norway said in a statement.
While Canada and the U.S. ban Arctic drilling for oil and gas motivated by environmental concerns, and majors such as Shell pull out of their Arctic projects due to financial pressures, Norwegian energy companies are planning to increase drilling in the country's Arctic shelf in the Barents Sea.
It seems that the limited oil price increase that followed OPEC's production cut deal has been enough for Statoil and Lundin to decide to allocate more funds to Arctic drilling, especially since the price rise has been accompanied by a major discovery for Lundin and a likely future major discovery for Statoil.
Related: Statoil Sues Researcher For Allegedly Stealing Secret Frack Tech
The last two years have seen investment in the Norwegian oil sector contract by 27 percent after a 70 percent rise from 2010 to 2014, when oil prices hit above $120 a barrel. At the time of this article's writing, one barrel of Brent traded at $56.51.
By Zainab Calcuttawala at Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More