Development has changed in the extraction industry

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After two years of decline, the development has been reversed in the industries within extraction of oil and natural gas. However, production costs and staffing numbers have continued to be cut.

Written by: Maria A. Campechano

Price effect due to increase in production value

The total production value for the industries within oil and gas extraction and extraction related services amounted to NOK 629 billion in 2017. This is an increase of 14.7 per cent compared with 2016, according to new figures from Extraction and related services.

Although there has been a positive development for the oil and gas extraction industry, there is still some uncertainty. The most vulnerable sector is within extraction-related services, which is affected by the fact that the market for projects in the oil industry and field development is still weak. 

Figure 1

Figure 1. Value of production, intermediate consumption and value added. Total for the oil and gas industries

The total value added, had a significant increase of 22.7 per cent in 2017. The figures show that the oil and gas extraction had an increase of 26.6 per cent. This is mainly due to increased oil and gas prices.

Prices in the related services industry fell sharply in 2017, with a decline of 16.9 per cent compared with the previous year, while the intermediate consumption decreased by 13.5 per cent and ended at NOK 104 billion. The increase in production value and value added is due to a drop in oil and natural gas prices  and reduction in costs in 2017. Total production of oil and natural gas (measured in Sm3) was almost unchanged compared with the previous year.

Figure 2. Value added, by industry

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Extraction of oil and natural gas, incl. transport via pipelines 99.56 99.82 107.52 112.64 119.37 163.74 177.56 126.21 171.96 342.16 322.31 279.73 295.86 359.29 465.22 546.65 491.69 633.14 441.89 486.93 600.98 648.08 600.91 587.25 473.64 389.63 493.173
Support activities for petroleum and natural gas extraction 0.00 0.00 1.96 2.15 2.61 3.67 6.23 7.56 8.60 6.41 9.11 11.94 10.96 9.92 14.31 17.88 20.43 25.26 39.75 39.05 39.51 41.07 49.43 50.46 49.89 38.57 32.046

Figure 3. Employment, by industry

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Extraction of oil and natural gas, incl. transport via pipelines 15830 16119 17338 16878 16498 16185 16183 15865 15998 15154 15079 16450 17396 17119 16780 18276 18675 20150 21433 21930 23869 25625 27159 27258 26470 25357 23840
Support activities for petroleum and natural gas extraction 0 0 4173 4603 4437 5517 7280 8080 9082 7743 9786 12358 12569 12357 11841 13470 15697 17819 26523 26828 30754 31421 35676 36814 33282 29182 25485

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