The estimate for 2023 is 1.4 per cent higher than the estimate given in the previous quarter. Furthermore, the 2023 estimate is 23,4 per cent higher than the corresponding estimate for 2022, given in the 4th quarter of 2022. The strong growth indicated has its background in the fact that many new field developments started in December last year. These had almost no incurred costs last year, but they have significant investments this year. However, it is worth mentioning that the investment figures collected in these statistics are in current value. According to Statistics Norway's national accounts, the annual growth in investment prices in the first eight months of the year is 10.3 per cent. Investment growth measured in fixed prices will therefore be clearly lower than the growth in current prices indicated in this measurement.
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.
Increased estimates indicate investment growth in 2024
The investments in oil and gas extraction and pipeline transport for 2024 are estimated at NOK 232 billion. This is 12.2 per cent higher than the estimate given in the previous survey. The increase is driven by higher figures for field development, but estimates are also increasing for all the other main categories, except for pipeline transportation. The higher estimate is mainly due to significant higher reported cost estimates on some development projects. These increased costs will probably not contribute much to expanded production capacity more than initially planned. In addition, a plan for development and operation (PDO) for a new development project has been submitted to the authorities, which is therefore now included in the count.
The estimate for 2024 is as much as 55 per cent higher than the estimate given for 2023 in the 4th quarter 2022. Almost all the indicated growth is driven by the fact that the estimate for field development is more than twice as high as the corresponding estimate for 2023, given a year ago. Development projects are only included in the investment survey when a PDO is submitted to the authorities. In the Norwegian parlament's tax measures package, which was adopted in June 2020 to remedy the industry in connection with the sharp drop in oil prices early in the corona pandemic, favorable taxation was provided for all developments for which PDO was delivered before the end of last year. This is the reason why a great many PDOs were delivered last year, most of them towards the end of the year. The far higher estimate for 2024 now than in the corresponding estimate for 2023 a year ago is largely because these PDOs were not included in the measurement a year ago, but they are included in the measurement now. As figure 2 above shows, the estimate for 2023 has increased a lot since the estimate given a year ago. Since few new projects are expected to be delivered in the next year, it is unlikely that the estimates for 2024 will increase to the same extent as the estimates for 2023 have done in the past year. Therefore, the indicated growth now estimated for 2024 is artificially high, and it should be interpreted with caution.
The estimates for fields on stream and exploration are both higher than the corresponding estimates for 2023. The estimates also indicate a strong rise for the categories pipeline transportation and shutdown and removal in 2024, but since these categories initially have low investment levels, they contribute to a lesser extent to the increase estimated for the investments in total. It is only the estimate for onshore activities that has a lower estimate for 2024 and which therefore contributes to pulling the total estimate down somewhat.
Clear investment growth in 2023
Total investments in oil and gas activity in 2023, including pipeline transportation, are estimated at NOK 216 billion. This is NOK 3.1 billion more than estimated in the previous quarter. It is mainly field development and exploration and concept studies that have increased.
The estimate for investments in pipeline transportation and extraction of oil and gas for 2023 is now 23.4 per cent higher than the corresponding estimate for 2022, given in the 4th quarter of last year. This is the same growth rate as stated in the previous measurement.
As Figure 4 above shows, it is field development that is also driving the upswing indicated for 2023. Fields on stream and pipeline transport also contribute slightly to higher investments, while exploration, onshore activities as well as shutdowns and removals contribute to dampening growth in 2023.
Clear seasonally adjusted growth in the 3rd quarter
The accrued investment costs increased by 10.2 per cent from the 2nd to the 3rd quarter of 2023 to NOK 56.4 billion. The seasonally adjusted figures show an investment increase of 11.5 per cent from the 2nd to the 3rd quarter. The investments carried out in the 3rd quarter ended up 1.4 per cent lower than in the estimate given for the 3rd quarter in the previous survey.
The accrued investments in the first three quarters in 2023 summed up to NOK 153 billion. Realization of the current estimate for 2023 assumes investments of NOK 63.3 billion in the 4th quarter, which implies investment growth of 12.2 per cent from the 3rd to the 4th quarter. Historical figures show that there are normally highest investments in the 4th quarter. Over the past 5 years, average investment growth from the 3rd to the 4th quarter has been 8.7 per cent, while corresponding growth in the 4th quarter of last year was 11.8 per cent. The current annual forecast therefore assumes higher growth from the 3rd to the 4th quarter than normal.
The annual estimate given in the 4th quarter of the investment year has been on average 2.5 percent higher than the final investments over the past 21 years, and in only two of these years has the annual estimate given in the 4th quarter been lower than the final investments. All in all, this gives reason to believe that some of the investments planned for the 4th quarter will be postponed until next year.