Norway’s oil investment to drop considerably in 2017- Survey

The SSB’s Norway oil investment survey for the fourth quarter, which was released today, showed a decline in oil investments in 2017. The survey was downwardly revised from the third quarter’s survey and is on the weak side of the projection of Norges Bank. According to the survey, oil investments will amount to NOK 146.6 billion next year, a decline of 12 percent to 13 percent.

The fall in investments is predominantly because of lower estimates for exploration and shutdown and removal, whereas the estimate for field development is adjusted upwards, noted DNB. For 2016, oil and gas investments are expected to amount to NOK 169.1 billion, up from the third quarter’s survey of NOK 163.5 billion.

The Norwegian central bank, Norges Bank, projects oil investments to fall 4.2 percent next year. Looking at the fourth quarter survey, the central bank might downwardly revise its forecast to -10 percent, said Nordea Bank in a research report. The decline of 10 percent is expected to have an adverse impact on growth.

According to Nordea Bank, the mainland growth is likely to accelerate in the years ahead as the drag on the economy from the oil sector is expected to alleviate. But the investments survey hints that the oil brake might be heavier through 2017, stated Nordea Bank. The upswing in the economic growth is expected to be postponed slightly.