Oct. 7 (Bloomberg) -- Norway left its forecast for 2008 oil production unchanged at 2.4 million barrels a day, below last year's output, as the country's aging North Sea fields dry up.

``This is slightly lower than the 2007 production figure,'' the Ministry of Petroleum and Energy said today in a statement on its Web site in connection with the 2009 budget bill. ``Oil production is expected to be quite stable in the next few years, before a gradual decline is expected in the years thereafter.''

The 2.4 million-barrel-a-day figure, which includes natural- gas liquids and condensate, was initially given by the government in May.

``The decrease in oil production is more than offset by the high oil prices and increasing gas production,'' Oil Minister Terje Riis-Johansen said in the statement. ``The result is an expected increase in the state's net cash flow from the petroleum sector of about 100 billion kroner ($16.1 billion) this year.''

Norway, which first discovered oil almost 40 years ago, achieved peak production in 2000 and 2001. State-controlled StatoilHydro ASA, the country's largest oil and gas company, and other producers are struggling to replace the crude they pump as global competition for new reserves intensifies.

The government said it expects oil revenue to rise to 448.5 billion kroner this year from 337.4 billion kroner last year, then decline by 3 percent to 433.8 billion kroner next year.

Oil Price Forecast

At the same time, Norway raised its forecast for the price of crude oil to 585 kroner ($94.12) a barrel this year and 500 kroner a barrel in 2009.

That's ``a considerable adjustment upward,'' compared with the 500-kroner forecast for this year and 400-kroner estimate for next year in the government's revised national budget in May, the ministry said.

``A reduction in economic growth worldwide combined with high oil prices have contributed to the slowing down of the demand growth for oil this year,'' it said. ``On the other hand, there is still little spare capacity and uncertainty regarding the supply of oil from several major producing countries.''

Since climbing to a record $147.27 in July, oil has slumped 38 percent on concern the global financial crisis will slow economic growth and sap energy demand. Crude traded in New York was up $2.05, or 2.3 percent, at $89.86 a barrel at 10:07 a.m. U.K. time today.

Gas Sales

Gas sales are expected to reach about 96 billion cubic meters this year, an increase of 7 percent from last year, and rise to about 106 billion cubic meters next year, the ministry said. ``This growth is expected to continue in the following years,'' it said.

These figures are below May forecasts of 100 billion cubic meters for this year and 110 billion for 2009.

Petroleum investments, including spending on exploration, will probably increase by 11 percent to 127 billion kroner this year, rising to 137 billion kroner next year and remaining ``at a high level in the next few years,'' the ministry said.

The 2008 investment forecast is above the 125 billion-kroner estimate made in May.

Norway is the world's fifth-largest oil exporter after Saudi Arabia, Russia, the United Arab Emirates and Iran, and the third- biggest natural-gas exporter.

To contact the reporter on this story: Vibeke Laroi in Oslo at vlaroi@bloomberg.net

Last Updated: October 7, 2008 05:25 EDT