Higher costs and ongoing field developments are set to boost oil and gas investments to a record high offshore Norway, the top hydrocarbon producer in Western Europe, according to new data from Statistics Norway.
Total investments in oil and gas activity in 2024, including pipeline transportation, are estimated at an all-time high of $24 billion (257 billion Norwegian crowns), Statistics Norway said on Thursday in its third-quarter survey of oil companies’ investment plans.
The latest estimate is 4.1% higher compared to the investment plans from the survey from the second quarter, which was $23.1 billion (247 billion crowns).
“The increase in estimates is mainly driven by higher cost estimates in production drilling within fields on stream,” Norway’s statistics office said.
The oil companies' investment estimates for this year are also 21% higher than the corresponding estimate for 2023 in the Q3 2023 survey.
“The higher estimate for field development is related to the fact that significantly higher costs have now been reported for some development projects than the operators had previously estimated,” according to Statistics Norway.
Oil and gas investments offshore Norway are set to remain high in 2025, too. Next year, companies expect to invest a total of $22.45 billion (240 billion crowns), the latest survey showed. This estimate is 11% higher compared to the forecasts from the companies in the previous survey in May, the statistics office said.
“The upward adjustment is largely driven by higher estimates within the categories fields on stream and field development,” Statistics Norway noted.
However, investments in exploration and onshore activities are moving in the opposite direction and are contributing to curbing the increase in estimates, it added.
While most exploration efforts are focused on areas close to existing infrastructure, Norway’s energy regulator has said it “would like to see companies exploring actively in more frontier areas.”
By Tsvetana Paraskova for Oilprice.com
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