Strong increase in value added from oil and gas activity
Energy and manufacturing
oljev, Extraction and related services, petroleum activity, oil production, gas production, pipeline transport, employees, wage costs, value added, production value, product input, added value, services, drillingOil and gas , Energy and manufacturing

Extraction and related services2008, preliminary figures



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Strong increase in value added from oil and gas activity

The gross value of production and value added in the Norwegian oil and gas industry increased by 26 and 27 per cent respectively from 2007 to 2008. The increase came as a consequence of higher oil and natural gas prices and a continuing increase in gas production.

Value of production, intermediate consumption and value added. 2000-2008. NOK bilion

The oil and gas activity in Norway is covered by the following three areas: Extraction of crude oil and natural gas, the service industry including drilling, and the pipeline transport industry. The gross value of production in the oil and gas activity amounted to NOK 781 billion in 2008; an increase of 26 per cent compared to 2007. The intermediate consumption increased by 19 per cent to NOK 115 billion. As a result, the value added increased to NOK 666 billion; 27 per cent higher than the previous year. The oil and gas industry employed nearly 38 000 people in 2008, up 10 per cent from 2007. Wage costs increased by 11 per cent.

Higher oil and natural gas prices drive rise in value creation

Around 93 per cent of the total value added from the oil activity stems from the extraction industry. The value of production increased by 27 per cent in this industry, and amounted to NOK 699 billion in 2008. The increase was mainly caused by historical high oil and gas prices, in addition to an increase in gas production. Intermediate consumption increased by 15 per cent, to NOK 77 billion. The value added was NOK 622 billion; up 28 per cent from 2007.

While the production of crude oil (incl. NGL and condensate) decreased by 3.8 per cent, the production of natural gas increased by almost 11 per cent. This led to a joint increase in petroleum production by 1.7 per cent compared to 2007 (see Production and reserves - 2008 ).

Despite huge fluctuations in the oil price throughout the year, the average price ended at a historically high level. The average Brent Blend crude price in 2008 was USD 96.2/bbl - 35.6 per cent higher than in 2007 (see Oil market, 2008 and 2009 ).

The extraction industry had nearly 19 000 employees in 2008; up 5 per cent from 2007. More operators and licensees on the continental shelf was the main cause, but a general increase in employment in the established companies also contributed. Wage costs increased by 4 per cent, to NOK 24 billion.

Employment and Wage Costs. 2000-2008

Value added, by industry. 2008. Per cent

Higher activity in the oil service industry

The service industry includes drilling and technical services directly related to the extraction activity.

Higher exploration activity on the Norwegian continental shelf in 2008 contributed to a 24 per cent increase in the gross value of production, which amounted to NOK 58 billion. With an intermediate consumption of NOK 35 billion, value added amounted to NOK 24 billion. The service industry employed almost 17 700 in 2008, which is slightly over 2 000 more than in 2007. Wage costs increased by 23 per cent.

Higher value of production in pipeline transport

The gross value of production in the pipeline transport industry was NOK 23 billion in 2008, which mainly consisted of income from transport tariffs. This is a 10 per cent increase from 2007. With an intermediate consumption of about NOK 3 billion, value added amounted to NOK 20 billion. This is an 8 per cent increase from 2006. Employment in the pipeline industry totalled around 1 140 employees.

Important announcement:

Annual statistics for 2008 will be published according to a new version of Norwegian industry classification (SIC2007) . This will have little effect on the annual statistics for oil and gas activity. One change, however, is that enterprises delivering service activities incidental to operation of pipelines will be assigned to a new industry group: 52.215: 'Service activities incidental to operation of pipelines'. This industry group will be included in industry group 49.500: 'Pipeline transport'. Industry group 52.215 is however very small and will therefore have very little effect on the principle figures.