Upward adjusted estimates for oil investments in 2020

The estimate for 2019 is 0.7 per cent higher than the estimate given in the previous survey, according to new figures from Investments in oil and gas, manufacturing, mining and electricity supply. The estimate is 17.7 per cent higher than the corresponding estimate for 2018 given in the 4th quarter of 2018.

The estimate for 2020 is 4.2 per cent higher than the corresponding estimate for 2019 given in the 3rd quarter of 2018. The previous survey suggested a growth of 5.4 per cent. Weaker growth is indicated now because the estimate for 2019 in corresponding measurements last year increased somewhat more than the estimate for 2020 now.

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 (link).

Strong increase in the estimates for field development in 2020

The investments in field development for 2020 are estimated at NOK 73.9 billion. This is 16 per cent higher than the estimate given in the previous survey. The higher estimate is mainly due to significant higher reported cost estimates on some development projects. These increased costs will probably not contribute to expanded production capacity more than initially planned. The increased estimate is also partly due to the fact that some development activity initially planned for 2019 now is postponed to 2020. In addition, a new plan for development and operation (PDO) is submitted for another development project. This project is now included in this survey.

More PDOs on development projects are expected to be submitted in late 2019 and in 2020. Among these are Balder X, Hod redevelopment, Halten South East and Grand. Balder X will probably be submitted late this year. This is an extensive redevelopment project which will probably have relative high investments in 2020. Grand is a development project which has about the same magnitude as Balder X. However, this project will probably have modest investments in 2020 because it is expected to be submitted relatively late in 2020. If the schedules for these plans are realised, the accumulated investment costs in 2020 from these projects will increase the investments in field development further, compared to the present estimate, all other things being equal.

The increase in 2020 compared to the corresponding estimate for 2019, given in the 4th quarter of 2018 is due to higher estimates within the categories fields on stream and shutdown and removal, while the estimates still indicate a decrease in the investment category field development. 

Strong investment growth in 2019

The investments in oil and gas extraction and pipeline transport for 2019 are estimated at NOK 182.9 billion. This is 0.7 per cent higher than estimated in the previous quarter.

The estimate for 2019 is 17.7 per cent higher than the corresponding measurement for 2018 given in the 4th quarter of 2018. The estimated increase from 2018 to 2019 is due to higher investments within the categories field development, fields on stream and exploration. 

Moderate investment growth in 3rd quarter

The accrued investments increased by 2.9 per cent in the 3rd quarter to NOK 45.6 billion. The seasonally adjusted growth from the 2nd quarter to the 3rd quarter came to 3.1 per cent. The investments in the 3rd quarter are 8.1 per cent lower than estimated in the previous survey.

The accrued investments in the first three quarters in 2019 summed up to NOK 128.1 billion. Realization of the current estimate for 2019 assumes investments of NOK 54.8 billion in the 4th quarter, which is 20 per cent higher than the accrued investments in the 3rd quarter. Historical figures show that accrued investments are usually highest  in the 4th quarter. In the last 21 years, the projections in the fourth quarter of the investment year, both on average and as mode, have been 2 per cent higher than final investments. Although drilling activity in October and so far in November indicates growth in investment activity in the fourth quarter compared to the third quarter, there is still reason to believe that some of the investments that are now in the plans for the fourth quarter will be postponed to 2020.