Norwegian Oil Spend to Shrink Further in 2017
Investment in Norway's oil and gas sector, a cornerstone of the country's economy, will continue to fall next year as weak crude prices curb oil firms' spending, a survey conducted by Statistics Norway (SSB) showed on Thursday.
Norway's offshore sector generates a fifth of gross domestic product and a fall in crude prices has forced energy companies to delay or cancel projects and lay off staff.
Due to lower investments in all categories, preliminary data suggest a drop of about 8 percent to 153.2 billion Norwegian crowns ($18.49 billion) when compared to the latest estimates for 2016, according to the survey.
SSB said the figures, compiled from oil companies data, will change as the companies update their plans.
The investment figure for 2016 was kept broadly in line with the February estimate.
"The estimate development for 2017 is expected to be more similar to a normal year than the development for 2016 so far. Therefore, it is not unlikely that the decrease from 2016 to 2017 will be less than indicated in this survey," the agency said in a statement.
Investment would fall mainly in exploration, field development and fields on stream, it said.
"We don't expect to see the kind of downward adjustments to the estimates that we saw last year," Swedbank Chief Economist Harald Magnus Andreassen said.
Brokerage Nordea Markets said it believed the numbers will eventually translate into a 7 percent decline in real terms, which is exactly in line with the latest forecast made by Norway's central bank.
The central bank kept its key rate steady at its May meeting, but said it could still cut interest rates later in 2016 to combat an economic downturn due to the drop in oil prices.
The price of oil is down by around 60 percent since June 2014 and currently trades at $50 per barrel. It has risen since the start of the year, but analysts do not expect it to climb back above $100 per barrel for the foreseeable future.
Reporting by Stine Jacobsen and Camilla Knudsen