Norway's oil and gas sector invests record amounts due to inflation
A survey by the Norwegian National Statistics Office (SSB) showed that investment in oil and gas projects in Norway will reach a new record in 2018. It may even increase in 2025, as inflation increases costs for development.
Norway has sanctioned new fields in recent years as companies have taken advantage of tax breaks during the pandemic to accelerate projects. This is part of a strategy to increase oil and gas production over decades.
The largest business sector in the country forecasts a record-breaking investment of $22.9 billion in 2024. This is in line with their estimate of 257.0 billion crowns made in August, and surpasses a previous record of 224 million crowns in 2014.
According to SSB, the investment for last year was 215 billion crowns.
The survey revealed that preliminary estimates for oil-and-gas investments in 2025 were 252.6 billion crowns compared to a previous estimate of 240 million crowns made in August.
SSB reported that the preliminary estimate for 2025 is 20 billion crowns more than what was forecasted for 2024 a year earlier. This suggests that we could be in for another record next year, since estimates usually rise as companies finalize their spending plans.
SSB did not specify which fields had been affected, but said that oil companies have reported significant increases in costs for "some" development projects by 2025.
The statistics agency stated that "these increased costs probably won't contribute much to expanding production capacity more than originally planned."
Environmentalists and other people who are concerned about the carbon emissions that come from burning oil or gas have a strong opposition to the Nordic countries' petroleum production.
Climate change is a result of human activity.
Norway supports the Paris Climate Agreements and the global goal of transitioning away from fossil fuels but says that the world still needs access to oil and natural gas.
(source: Reuters)
