After rising less than previously anticipated this year, an industry survey by SSB showed Norwegian oil and gas investment is expected to decline sharply in 2021. While ongoing oilfield construction work continues largely as expected, the biggest drop will come in the exploration for new reserves and in spending on development plans.
From 185.4 billion seen in February, the closely watched forecasts show 2020 investment plans have been slashed to 180.3 billion Norwegian crowns ($19 billion), based on data from oil companies. However, it is still above last year’s 177.5 billion.
Three months ago, 152 billion crowns expected in investment in Norway’s oil sector. Now, the investment next year is projected at 145.6 billion crowns. As coronavirus lockdowns and travel restrictions sharply reduced demand for fossil fuels, the price of North Sea oil hit two-decade lows in April, but have since recovered some losses as major producing nations agreed to cut their output.
In order to preserve cash during the downturn, Norway’s Equinor and many other oil companies have said they intended to cut both operating and capital spending.
