The estimate for 2024 in the statistics oil and gas, manufacturing, mining and quarrying and electricity supply now indicates an increase by about 30 per cent from 2023 to 2024.
Total accrued investments in oil and gas extraction and pipeline transport for 2023 amounted to NOK 215 billion, which is 22 per cent higher than final investments in 2022. According to the quarterly national accounts, prices of investment goods have increased by as much as 10.5 per cent from 2022 to 2023, so that the volume growth of investments in 2023 is clearly lower than the nominal growth measured in these statistics.
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.
Record high initial estimate for 2025
The investments in oil and gas extraction and pipeline transport for 2025 are estimated at NOK 205 billion. This is nominally the highest initial estimate given since these statistics were created. The estimate is 15 per cent higher than the corresponding estimate given for 2024 in 1st quarter 2023.
The indicated increase in 2025 is mainly due to higher estimates in fields on stream. The estimates indicate even stronger growth within the categories of onshore activities as well as shutdown and removal, but since these categories initially have lower activity, they contribute to a lesser extent to reinforcing the upturn that is estimated for investments in total. The estimates for exploration and pipeline transportation are also somewhat higher than in the initial estimate for 2024, but contribute only marginally to raising the overall estimate. The estimates for field development are in the opposite direction, which is 1.5 per cent lower than the corresponding estimates for 2024. and therefore contributes to dampening somewhat the indicated upswing overall.
Estimate for 2024 upward adjusted
Total investments in oil and gas activity in 2024, including pipeline transportation, are estimated at NOK 244 billion, which historically is the highest nominal estimate given in these statistics. This is 5 per cent higher than estimated in the previous quarter. There is an increase in all main categories, but it is particularly increased estimates in fields on stream, field development and pipeline transportation that contribute to the upward adjustment.
The estimate for 2024 is about 30 per cent higher than the corresponding estimate for 2023, given in the 1st quarter 2023. It is worth mentioning that the investments made for 2023 ended up as much as 15 percent higher than the estimate given for 2023 a year ago, with which we are now comparing the current 2024 estimate. Historical estimates show that the annual estimate given in February of the investment year has been on average at the same level as the final investments for the past 21 years, and none of these years, except for 2023, has had final investments that have been as much as 15 percent higher than the February estimate. With this background, it may be more appropriate to compare the estimate given for 2024 now with final investments for 2023. With that as a starting point, a growth of 13.2 per cent in 2024 is indicated.
As Figure 3 above shows, the upturn indicated in 2024 is broad, investments in all investment areas are expected to increase compared to corresponding estimates given for 2023. But it is a marked increase in field development that contributes most to the projected upturn in 2024. The many field developments for which a plan for development and operation (PDO) was delivered late in 2022 will overall have higher investment activity in 2024 than in 2023.
Clear investment growth in 2023
Total investments in oil and gas extraction and pipeline transport for 2023 were NOK 215 billion. This is in current value as much as 22 per cent higher than final investments in 2022. The rise was driven by markedly higher investments in field development. The investments in fields on stream and pipeline transportation also contributed to the upturn, while exploration and concept studies, shutdown and removal as well as onshore activities had lower investments in 2023 and thus contributed to dampening growth.
Investments in field development amounted to NOK 95 billion in 2023. This is as much as 52 percent higher than in 2022. The strong rise is largely due to the fact that the many new field developments for which a PDO was submitted at the end of 2022 had very low investments made in 2022, while they had significant investments in 2023.
Investments in fields on stream ended at NOK 85 billion, 13.5 per cent higher than the year before. In current value, these are the highest operating investments since 2014. The high activity in fields on stream may be related to high product prices and the fact that favorable tax rules have triggered several projects and drilling campaigns also in fields on stream.
The investments in shutdown and removal amounted to NOK 4.5 billion in 2023. This is 25 per cent less than the investments in this category in 2022. This is a category where the level of activity can vary somewhat from year to year. The level of activity depends on how many platforms are to be removed from the shelf and how many wells are shut down and permanently plugged. It is possible that the high investment and drilling activity on field development and fields in operation in 2023 may to some extent have displaced and postponed activity in shutdown and removal.
NOK 2.8 billion was invested in pipeline transportation in 2023. That is almost three times as much as in 2022. Construction of new pipelines have started this year in connection with some of the new field developments. This has contributed to a clear upswing in activity in this category in 2023.
Sharp drop in activity within concept studies in 2023
Investment expenditure on exploration and concept studies ended at NOK 27.3 billion in 2023, which is 14.4 per cent lower than the year before. Nevertheless, the four subcategories that belong to under exploration had overall 8 per cent higher investments in 2023 than in the previous year. For concept studies, on the other hand, there was a decrease of 93 per cent, from a record high of NOK 6.3 billion in 2022 to only 0.4 billion in 2023. This led to an overall decrease in the collective category exploration and concept studies in 2023. Concept studies include planning activities linked to forthcoming field development. The record high activity in this category in 2022 is directly related to the large accumulation of new development projects for which PDO was delivered late in 2022. After these developments have started, there have been very few new developments to plan for. This is the reason why the level of activity within this category has fallen so dramatically in 2023.
NOK 15.5 billion was spent on exploration drilling in 2023, which is 7.1 per cent more than in 2022. According to the Norwegian Offshore Directorate, 35 exploration wells were started in 2023, one more than in the previous year. Of last year's wells, 23 were exploration wells and 12 appraisal wells. 14 new discoveries were made, which resulted in an increase in resources of approximately 315 million barrels of oil equivalent.
Higher investments in 4th quarter
The final investments in the 4th quarter came to NOK 62.3 billion. This is 1.6 per cent lower than estimated in the previous quarter, but 10.4 per cent higher than the investments in the 3rd quarter, unadjusted. The seasonally adjusted increase from the 3rd quarter to 4th quarter was 5.8 per cent.