Extraction and related services, 2011, preliminary figures

The oil and gas activity in Norway consists of the extraction of crude oil and natural gas, service activities incidental to oil and gas extraction and pipeline transport. The production value for these three industries amounted to NOK 791 billion in 2011, an increase of 18 per cent from 2010. The intermediate consumption showed an increase of 4.6 per cent and amounted to NOK 151 billion in 2011. This resulted in a value added of NOK 640 billion for 2011, up NOK 114 billion or 22 per cent from 2010.

Strong increase in oil and gas prices, weak fall in production

The value of petroleum products produced in 2011 increased by 22 per cent to NOK 670 million. This is despite an overall decline in production of nearly 5 per cent, measured in tonnes. The increase in production value was due to rapidly growing prices of both oil and natural gas. Oil prices rose by about 30 per cent from the previous year, while gas prices increased by 26 per cent.

Production by product showed a fall in the production of oil and natural gas, but an increase for condensate and NGL (Natural Gas Liquids). The fall in the production of natural gas came after a steady increase since the turn of the millennium. The increase in the price for oil and gas more than offset the fall in production. Also see Production and reserves, in the right margin.

The extraction industry, which consists of businesses with interests in oil and gas fields, differs from most other sectors of the Norwegian economy in that intermediate consumption represents a very small share of the production value; 13 per cent in 2010. The total intermediate consumption increased by 5 per cent from 2010, and amounted to NOK 85 billion in 2011. The combined value added increased 5 per cent from 2010, and ended on NOK 85 billion in 2011. Value added for the extraction industry ended at NOK 585 billion in 2011, up 25 per cent from the year before. This is still 5 per cent below the peak in 2008.

The investments in the extraction industry amounted to NOK 146 billion in 2011, an increase of nearly 17 per cent from 2010. The incline was mainly due to investments in existing and new fields as a consequence of higher product prices. Also see Investment statistics in the right margin.

Stable value added in the oil service industry

The service industry includes drilling and technical services directly related to the extraction activity.

In 2011, the gross value of production amounted to nearly NOK 103 billion. This is an increase of NOK 3 billion, or 3 per cent, from 2010. The intermediate consumption had a similar increase with 4 per cent. This resulted in a marginal increase in the value added of NOK 0.3 billion, or 1 per cent from 2010 to 2011. This corresponds to a value added in 2011 of NOK 39.5 billion.

Decrease in pipeline transport

The gross value of production in the pipeline transport industry mainly consists of transport tariffs paid by operators and licensees for transportation of oil and gas. In 2011, the gross value of production in the pipeline industry decreased by 12 per cent, and amounted to NOK 18 billion in 2011. With an intermediate consumption of NOK 2.2 billion, value added amounted to NOK 16 billion. This is a 13 per cent decrease from 2010.

Service industry biggest employer, extraction industry biggest value creator

The oil and gas industry employed close to 55 000 people in 2011, an increase of 12 per cent from 2010. Total wage costs increased by 3 per cent, to NOK 54 billion in 2011.

Even though the extraction industry is by far the biggest when it comes to value added, around 89 per cent of the total value added from the three oil and gas industries stems from the extraction industry. However, the industry employed only 45 per cent of the total number of people working in the three oil and gas industries. The service industry was the biggest employer in 2011, with a share of 57 per cent.