Oil and gas activities, investments, Q3 2011

The increased estimates for both 2011 and 2012 are mainly due to the inclusion of five new development projects in the survey this quarter. Ekofisk South, Eldfisk II, Valemon, Knarr and Hyme were approved by the authorities during the summer.

The estimate for 2012 is the highest estimate since Statistics Norway started collecting estimates in 1985 (measured in current prices). The estimate for 2012 is NOK 22.9 billion higher than the corresponding estimate for 2011 given in the 3rd quarter of 2010. The increase for 2012 compared to the corresponding estimate for 2011 is due to higher investments in exploration, field development, fields on stream and pipeline transportation, while the estimate indicates a decrease in onshore activity.

The investments for exploration activity in 2012 are now estimated at NOK 32.4 billion, which is NOK 2.5 billion higher than the estimate given in the previous quarter. The estimate is NOK 1.8 billion higher than the estimation for 2011 given in the 3rd quarter of 2010.

Investments for field development and fields on stream in 2012 are estimated at NOK 135.7 billion. This is NOK 24.0 billion higher than the corresponding estimate given for 2011.

Extensive drilling plans

The licensees on the Norwegian Shelf plan to spend NOK 87.7 billion on the drilling of production and exploration wells in 2012. This is 41.5 per cent more than the accrued drilling costs in 2010. Uplifting discoveries in recent months have generated more optimism regarding the resource potential on the Norwegian Shelf and the discoveries require delineation wells to survey them closer. Mature fields need more petroleum resources to maintain efficient operations. Many exploration wells are therefore drilled close to existing fields. High crude oil prices stimulate the oil companies to also increase their drilling of production wells. Exploration drilling is executed by mobile rigs while production drilling is carried out by mobile rigs or fixed platforms. The mobile rig capacity on the Norwegian Shelf is not expected to increase significantly next year. There is therefore reason to believe that some wells planned to be drilled in 2012 will be postponed.

Onshore activities and pipeline transportation are estimated at NOK 3.2 and 0.8 billion respectively.

Higher estimates for 2011

Total investments in oil and gas activities for 2011, including pipeline transportation, are estimated at NOK 151.7 billion. The estimate is NOK 12.3 billion higher than the corresponding estimate for 2010 and NOK 7.3 billion higher than the estimate given in the previous quarter.

The accrued investments in the 1st quarter and the 2nd quarter came to NOK 32 and 34.6 billion respectively. This amounts to NOK 66.6 billion for the 1st half of the year. Realisation of the current estimate for 2011 assumes investment of NOK 85.1 billion in the 2nd half of 2011. Even though the development in the 1st half of the present year shows increasing investment activity there is reason to believe that some of the investments planned for 2011 might be postponed to 2012.

Investments in the exploration activity in 2011 are estimated at NOK 28.5 billion, which is NOK 0.4 billion higher than the estimate given in the previous quarter. The estimate is also NOK 0.4 billion higher than the corresponding estimate for 2010, presented in the 3rd quarter of 2010.

Investments for field development and fields on stream are now estimated at NOK 115.9 billion; an increase of NOK 6.4 billion compared with the estimate in the previous quarter and NOK 13.3 billion higher than the corresponding estimate for 2010.

Onshore activities and pipeline transportation are estimated at NOK 6.5 and NOK 0.7 billion respectively.

Tables:

• Table 1 Accrued and estimated investment costs. Extraction of crude petroleum and natural gas and transport via pipelines. 2007-2012. NOK million
• Table 2 Accrued investment costs for oil and gas exploration, by cost category. Q2 2009 - Q2 2011. Million NOK
• Table 3 Accrued investment costs for field development and fields on stream. Q2 2009 - Q2 2011. Million NOK
• Table 4 Estimated and accrued investment costs for oil and gas extraction and pipeline transport. 1985-2012