Norwegian oil and gas investment, a key economic driver, is now expected to decline sharply in 2021 after rising less than previously anticipated this year, an industry survey by the national statistics agency (SSB) showed on Thursday, Trend reports with reference to Reuters.
The closely watched forecasts, based on data from oil companies working in Norway, show 2020 investment plans have been cut to 180.3 billion Norwegian crowns ($19 billion) from 185.4 billion seen in February.
In 2019, investment stood at 177.5 billion crowns, SSB said.
Next year, investment in Norway’s oil sector is now projected at 145.6 billion crowns, compared to a forecast of 152 billion three months ago, SSB said.
The price of North Sea oil hit two-decade lows in April as coronavirus lockdowns and travel restrictions sharply reduced demand for fossil fuels, but have since recovered some losses as major producing nations agreed to cut their output.
Oil companies, including Norway’s state-controlled Equinor, have said they intend to reduce both operating and capital spending in order to preserve cash during the downturn.
A planned tax cut currently making its way through parliament could lead companies to sanction more projects by next year however, the statistics agency added.
“Therefore, it is not unlikely that the decline for 2021 will be less severe than what is indicated in this survey,” SSB said.