Growth in oil investments for 2019

The estimate for 2018 is 0.4 per cent higher than the corresponding figure for 2017 given in the 3rd quarter of 2017.

The estimate for 2019 is 16.5 per cent higher than the corresponding estimate for 2018 given in the 3rd quarter of 2017.The strong growth indicated for 2019 should be interpreted with caution. The estimate for 2018, given in the 3rd quarter of 2017, which we now compare the 2019 estimate with, was NOK 141.7 billion. Two quarters later, in the survey in the 1st quarter 2018, the estimate for 2018 had increased by 13 per cent to NOK 160 billion, mainly due to the submission of 7 plans for development and operations (PDOs), see the figure 2 below. Although the PDO for Johan Sverdrup phase 2 very likely will be submitted in late August, which will increase the 2019- estimate in the next survey, it is reason to believe that comparable estimates for 2018 and 2019 will converge in the survey in the 1st quarter of 2019 and with that indicate a lower growth for 2019 than indicated in the present survey.

Quarterly investment statistics for oil and gas extraction and pipeline transport are included in the survey Investments in oil and gas, manufacturing, mining and electricity supply. For more details about total investments, please see the following article.

Strong increase in the field estimates for 2019

The investments in fields on stream for 2019 are estimated at NOK 59.1 billion. This is 10 per cent higher than the estimate given in the previous survey. Since the previous survey the operators on the Norwegian Shelf have submitted their preliminary budgets for the next year. This updating has in sum resulted in higher estimates in fields on stream. The estimate for field development is now NOK 66.6 billion, which is 8.7 per cent higher than the estimate given in the previous quarter. The higher estimate is partly due to the submission of a PDO on another development project. This project is now included in this survey.

The increase in 2019 compared to the estimate for 2018, given in the 3rd quarter of 2017 is due to higher investments within the categories field development and exploration, while the estimates indicate a decrease in the investment categories fields on stream and pipeline transportation.

The investments in onshore activity and pipeline transportation for 2019 are estimated at NOK 1.5 and 0.6 billion, respectively. The estimates are 17 and 70 per cent lower than the corresponding estimates for 2018, given in the 3rd quarter of 2017. The investments in these categories have showed a sharp decline in the last years. In 2015, the investments in onshore activity and pipeline transportation came to NOK 10.9 and 4.4 billion, respectively.

Estimates for 2018 indicate zero growth

The investments in oil and gas extraction and pipeline transport for 2018 are estimated at NOK 156.3 billion. This is about the same estimate as given in the previous quarter.

The estimate for 2018 is 0.4 per cent higher than the corresponding estimate for 2017 given in the 3rd quarter of 2017. The estimated increase from 2017 to 2018 is due to higher investments within the categories field development and exploration. The estimates for fields on stream, onshore activity, pipeline transportation and shutdown and removal have the opposite path, and show a decrease compared to the corresponding estimates for 2017, given in the 3rd quarter of 2017.

Increasing investment activity in the 2nd quarter

The accrued investments from the 1st quarter to the 2nd quarter increased by 21 per cent, from NOK 31.4 billion to NOK 38.1 billion. The seasonally adjusted growth from the 1st quarter to the 2nd quarter came to 3.5 per cent. The investments in the first half of 2018 are 7.4 per cent lower than the investments in the first half of 2017.

High estimates for the second half of 2018

While the accrued investments in the first half of 2018 are accumulated to NOK 69.5 billion, the investments in the second half of 2018 are estimated to increase by 25 per cent, to NOK 86.8 billion. Figures from the last 17 years show that investments on average have been 9 per cent higher in in the second half of the year than the first half, In the last three years the investments in the second half of the year have been lower than in the first half. This is due to the decline in the investments from 2014 to 2017.

In the last 17 years the estimates given in the 3rd quarter have been on average 4.1 per cent higher than the final investments. When, in addition, the estimate for 2018 assumes as much as a 25 per cent increase from the first half to the second half of the year, it is likely that the final investments will be lower than the estimate for 2018, given in this survey.