Downward adjusted decline in oil investments for 2017

The latest estimates from the petroleum industry for 2017 show that oil investments are expected to amount to NOK 155.6 billion. This is 7.1 per cent lower than the corresponding figure for 2016, given in the 3rd quarter of 2016. The decline is lower than indicated in the previous survey, which showed a 9.1 per cent decrease. The current lowered decline is due to an upward adjusted estimate for 2017 and a downward adjusted estimate for 2016 given in corresponding surveys last year.

Quarterly investment statistics for oil and gas extraction and pipeline transport are included in the survey Investments in oil and gas, manufacturing, mining and electricity supply. For more details about total investments, please see the following article).

Downward adjusted estimate for 2018

The investments in oil and gas extraction and pipeline transport for 2018 are estimated at NOK 141.8 billion. This is 1.5 per cent lower than the estimate given in the previous quarter. Lower figures within exploration more than offset the positive contribution from higher estimates within fields on stream and field development.

1 The contribution by cost category is calculated by multiplying the percentage change of the category with the category's share of investments in extraction and pipeline transport.

The estimate for 2018 is 6.9 per cent lower than the corresponding estimate for 2017 given in the 3rd quarter of 2016. All the main categories show a decrease, but the decrease within onshore activity and exploration and concept studies contribute the most to the decrease which is indicated from 2017 to 2018.

In the statistics for investments within oil and gas development, projects are first included when a plan for development and operation (PDO) is submitted to the government. PDOs are expected to be submitted for several development projects in late 2017. The largest of these are Johan Castberg and Snorre Expansion. If they are delivered according to plan, these projects will be included in the survey in 4th quarter 2017 or in 1th quarter 2018. In addition, it is expected to be submitted many PDO applications next year. Skarfjell is expected to be delivered within February next year and Johan Sverdrup Phase 2 during the second half of 2018. If the schedules for these plans are realized, the accumulated investment costs in 2018 from these projects will increase the investments significantly in the field development, compared to the present estimate.

Lower decrease in investments for 2017

The investments in oil and gas extraction and pipeline transport for 2017 are estimated at NOK 155.6 billion. While the oil and gas investments from 2015 to 2016 decreased by 18.8 per cent, the present surveys` estimated decline for 2017 is 7.1 per cent.

This is a much lower decrease than indicated for 2017 in the earliest estimates, given for 2017 in 2016. The estimates for 2017 indicated a 20 per cent decline. The reason for the much lower decline in the current estimate for 2017, is a substantial decrease in the estimates for 2016 during the estimate cycle for this year, while the estimates for 2017 had a more stable development, as shown in figure 2 above.

The estimates for the categories fields on stream, onshore activity and shutdown and removal contribute the most to the decrease from 2016 to 2017.

1 The contribution by cost category is calculated by multiplying the percentage change of the category with the category's share of investments in extraction and pipeline transport.

The accrued investments from the 1st quarter to the 2nd quarter increased from NOK 35.6 billion to NOK 39.4 billion. The increase is in accordance with seasonal pattern, and the seasonally adjusted growth from the 1st quarter to the 2nd quarter came to 0.6 per cent. The estimates for the 3rd and the 4th quarter are now NOK 40.9 and 39.7 billion, respectively. While the accrued investments in the first half of 2017 are accumulated to NOK 75 billion, the investments in the second half of 2017 are estimated to increase to NOK 80.6 billion. Higher investments in the second half of the year are also in accordance with the seasonal pattern.