Norway's Investments to Fall 18.5% in 2015, Says Report

Oil and gas investments in Norway are expected to fall by 18.5% next year, reads a note released by financial services group DNB.

‘Statistics Norway's August survey for oil and gas investments supports the expectations of a sharp decline in oil investments next year. Companies say they will invest NOK 185.3 billion in 2015. This is 13.9 percent less than the estimate for 2014 issued August 2013. Moreover, the figures for 2015 include costs associated with removal and shutdown. These costs were not included in the figures for 2014 (given in August last year). Adjusted for this the decline is 18.5 percent from 2014 to 2015,’ DNB said on Monday.  

The financial services group, which also sees a decline in manufacturing investments, basically forecasts 2015 oil and gas investments to go back to 2013 levels.  

According to the statement, investments in the large new field Johan Sverdrup have not been considered in the analysis. They could partially limit the damage, but one  single field would not have too much of a positive impact.

‘In the Monetary Policy Report from June, Norges Bank assumed a decline in oil investment of 10 percent (by volume). Based on last week’s survey this estimate might be revised down to -15 percent, in isolation pulling down the estimate for mainland economic growth next year by 0.2 percentage points.’ 

According to the last figures, Norway produced less gas than forecasted for the third consecutive month.