Norway Oil Lobby Cuts Spending Forecasts on Costs, Crude SlumpMikael Holter and Saleha Mohsin
Norway’s oil lobby cut its investment forecasts as companies in western Europe’s biggest crude exporter rein in spending to handle rising costs and lower energy prices.
Investments will fall to 201 billion kroner ($29 billion) in 2015 from 221 billion this year, the Norwegian Oil and Gas Association said today in a report. That compares with a 2015 nominal-price forecast of 218 billion kroner from a year ago.
“We assumed that 2014 would be a peak year because a number of the large producing fields on the Norwegian Continental Shelf were then set to complete their biggest modifications,” Bjoern Harald Martinsen, economics manager at the association, said in a statement. “The current decline in investment therefore represents to a great extent an anticipated correction.”
Companies including Statoil ASA, the state-controlled operator of more than 70 percent of Norway’s oil and gas production, have cut investment plans to raise shareholder returns that have been hurt by a decade of rising costs in the offshore industry. At the same time, oil prices have fallen 30 percent since June, threatening profitability of some projects and risking further delays and cancellations.