OSLO--Norway's oil and gas companies expect spending to drop 12%
this year after reaching an all-time high in 2014, an official
survey showed Thursday, as plunging oil prices compound an expected
slowdown after years of double-digit growth.
In 2015, oil companies operating in Norway, the world's
10th-largest oil exporter, expect to invest 189.05 billion
Norwegian kroner ($24.34 billion) in the industry, according to
Statistics Norway's first-quarter survey.
Oil companies said they planned to spend less than previously
expected on exploration and the operation of existing fields,
likely due to the plunge in oil prices since last June, the
statistics agency said.
The survey was roughly in line with expectations.
Spending last year reached at an all-time high at 214.31 billion
kroner, but was up only 1% from the previous year, compared with
double-digit percentage growth in each of the preceding three
years.
Industry association Norwegian Oil and Gas has forecast spending
to peak in 2014, but to remain high and stable for the rest of the
decade.
Norway's oil sector has roughly tripled spending in the past
decade, as high and stable oil prices triggered the development of
previously unprofitable projects, and costs were boosted by
capacity constraints in the global oil-field services industry.
In 2010, oil companies cut their spending in Norway after the
global financial crisis led to a temporary setback in oil prices,
but as prices rebounded, Norwegian oil and gas investments grew 16%
in 2011, 17.5% in 2012 and 22.1% in 2013, according to the
statistics agency.
However, rising costs threatened profits already before the
recent oil plunge. Norway's dominant oil producer, Statoil ASA
(STO), introduced last February a cost-cutting program which was
boosted a further 30% this year, targeting cost cuts of $1.7
billion by 2016.
Norway produced 1.4% more oil and gas last year at 3.73 million
barrels of oil equivalent a day, according to the Norwegian
Petroleum Directorate. Out of that, its crude oil output rose 3% to
1.51 million barrels a day, the first increase in 13 years, but
production has still more than halved since the peak in 2000.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com
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