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High field development activity in 1997 and 1998
In the investment survey conducted in the 3rd quarter of this year the total oil investments are estimated to be NOK 58.5 billion in 1998, an increase of 15.5 billion compared with the corresponding figures for 1997. This increase is mainly due to increased investments for field development.
The investment for 1997 is now NOK 66.2 billion. The increase of NOK 14.2 billion from the corresponding estimate for last year is mainly due to increased investments for field development and operation of the fields in addition to the fact that the exploration activities have increased. It therefore looks like 1997 may be a new peak year for oil investments.
Field development and fields on stream
For 1998 the investments for field development were estimated to NOK 30.6 billion. This is an increase of as much as NOK 8.4 billion compared with the corresponding figured for 1997. The increase is mainly due to new field developments that have been approved. Among others Troll Oil Gasprovince, Jotun and Oseberg Sør can be mentioned; fields that now are in the survey for the first time. Investments for field development are this year estimated to be NOK 36.2 billion, an increase of NOK 7.5 billion compared with a corresponding estimate for last year. Even if the investments usually are somewhat adjusted down towards the end of a year, it may look like the investments for field development this year may reach the same level as in the record year of 1993 where the accrued investments for field development were NOK 35.2 billion.
The investments for fields on stream next year are estimated to be NOK 10.5 billion. This is NOK 2.1 billion higher than the corresponding estimate for 1997, and the highest estimate registered in the 3rd quarter before the investment year. The increase is mainly due to the fact that new fields have changed to be on stream since the 3rd quarter of last year, among others Vigdis, and the fact that new fields will come on stream during the fall and the winter. The estimate for fields on stream in 1997 is now NOK 10.5 billion, an increase of NOK 2.4 billion compared with the corresponding figures for last year.
High exploration activity
In the 3rd quarter survey the exploration investments in 1998 are estimated to be NOK 8.9 billion, an increase of NOK 1.7 billion compared with the corresponding 1998 estimate. The upward adjustment of NOK 1.2 billion from the previous survey is mainly due to the fact that the budgets are now changed in cooperation with the other license partners. This has resulted in new drilling programmes having been added and that the cost estimates for previously planned programmes have been adjusted upward. The estimate for 1997 is now reported to be as much as NOK 9.7 billion. This is NOK 3.4 billion higher than the corresponding estimate for last year and the highest estimate that is registered the 3rd quarter in the investment year. For previous years it has been a tendency to see that the estimates have been somewhat reduced in the last two surveys towards the final figure for the year, but everything now indicates that 1997 may be a record year as far as exploration activities are concerned. In the first half of this year the exploration investments were NOK 3.8 billion.
Onshore activities and pipeline transport
In the investment survey conducted in the 3rd quarter this year the pipeline investments for next year are estimated to be NOK 7.2 billion, NOK 2.6 billion higher than the corresponding 1997 estimate. The estimate for 1997 has, however, been adjusted upward with NOK 4.0 billion since the 3rd quarter of 1997. This adjustment is mainly due to the decision to build Åsgård Transport and Europipe II. It is not expected that the estimate for 1998 will show the same kind of increase throughout the next surveys.
The investments for onshore activities in 1998 are estimated to be NOK 1.2 billion, an increase of 0.7 billion compared with corresponding 1997 estimate. The estimate for 1998 will most likely increase when the Kårstø development project is included. For this year the investments are estimated to be NOK 1.1 billion.
Annual Statistics for the Oil Activities, 1996
Substantial growth in the value added in the oil industries
The value added in the oil industries increased 20.4 per cent to NOK 147.9 billion from 1995 to 1996. This is mostly due to a considerable increase in the oil production and prices throughout 1996.
The oil industries include the operators’ and the licencees’ activities connected to extraction and pipeline transport of crude oil and natural gas and also the service activities and oil drilling on a contractual basis. The value added is an expression of the formation of values. It is mainly the three factors production, prices and intermediate consumption that determine the value added.
The extraction contributed to the increase
First of all it was the extraction of crude oil and natural gas that contributed to the increase of NOK 25.1 billion in the oil industries’ formation of values from 1995 to 1996. Here the value added increased by NOK 21.4 billion or 19.8 per cent. The relative growth was, however, even stronger for enterprises that conduct oil drilling on a contractual basis and pure services connected to the oil activities. In these cases the value added increased with as much as 33.9 per cent or NOK 0.9 billion. The pipeline transport sector as well had a considerable growth in the value added of 23.4 per cent or NOK 2.8 billion.
Increased sales value
The sales value of the crude oil and natural gas production in 1996 is calculated to be NOK 145.6 billion. This is an increase of NOK 27.2 billion or 23 per cent compared with the previous year. The growth is mainly due to the significant increase of the production of crude oil including NGL (natural gas liquids) and condensates combined with higher prices. The production of crude oil, included NGL and condensates, increased by as much as 18.4 million tonnes of oil equivalents (mtoe) or 13.3 per cent from 1995 to 1996.
The norm price of crude oil and the reported CIF prices of NGL and condensate increased by 24.7, 39.3 and 15.3 per cent, respectively. The fields Heidrun and Troll Vest contributed the most to the increase in the value of the oil production. Both these fields started production in the fall of 1995. As for the largest fields (Statfjord, Gullfaks, Oseberg and Ekofisk) the sales value of crude oil increased for all the fields, but it was only at Oseberg that the production volume showed a rise. The production of natural gas was 9.8 mtoe higher in 1996 than the previous year, while the price for natural gas showed less of an increase. Heimdal and Troll Øst contributed the most to the increase in the value of the gas production.
Intermediate consumption
The total intermediate consumption within the oil industries amounted to NOK 34.2 billion in 1996. This is an increase of NOK 5.8 billion or 20.3 per cent compared with 1995. The intermediate consumption increased considerably in the oil and natural gas extraction sector and in service activities and oil drilling on a contractual basis, with 21.4 and 29.7 per cent, respectively. In the pipeline sector the intermediate consumption was 23.0 per cent lower in 1996 than in the previous year. The total cost for wages and salaries showed an increase of 4.2 per cent from1995 to1996. The intermediate consumption per extracted resource unit for the producing oil and gas fields was in 1996 NOK 12.60 per barrel, an increase of 5.2 per cent compared with the previous year. This is, however, considerably lower than for 1993 and earlier. Some of the explanation for the reduced intermediate consumption per extracted resource unit the last years may be due to the work by NORSOK where it consciously has been focused on cost effectiveness.
Increased employment
In oil and natural gas extraction and connected service activities and oil drilling on a contractual basis, i.e. the oil industries except pipeline transport, 21 659 persons were employed in 1996. This is an increase of 724 persons from 1995 to 1996. In service activities and oil drilling on a contractual basis the employment rose by 1 181 persons, while in the extraction of crude oil and natural gas the employment was reduced by 457 persons.
The cost of wages and salaries per employed in the oil industry except pipeline transport increased by 1.8 per cent from 1995 to 1996 (from NOK 557 000 to NOK 567 000 per employed). Service activities and oil drilling on a contractual basis showed the largest percentage increase, up with as much as 5.2 per cent. In the extraction of crude oil and natural gas the increase per employed was 2.9 per cent.
The total accrued production and CO2 taxes in the extraction of crude oil and natural gas was just about the same in 1996 as in 1995. The production fees, which make up the largest amount, decreased by 2.1 per cent, while the CO2 taxes increased by 9.7 per cent.