Oil and gas companies operating in Norway, western Europe’s biggest producer, cut investment forecasts for 2017 as they continue to wrestle with a collapse in crude prices.
The companies expect to invest 147 billion kroner, down 3.6 percent from a previous estimate for the year, according to a quarterly survey published Wednesday by Statistics Norway. Norway is set for a third year of investment declines, with spending seen at 169 billion kroner this year.
The lower 2017 spending forecast was “mainly due to lower estimates for exploration and shutdown and removal,” the statistics office said in the statement. “Exploration wells and removal projects originally planned for 2017 are now postponed.”
Oil companies are delaying development projects and exploration drilling in Norway and elsewhere to weather a decline in crude prices that started in 2014. More than 40,000 jobs have been cut in Norway’s offshore industry, according to DNB ASA, as survey unemployment reached a 20-year highover the summer.
While the central bank has lowered rates to a record, the downturn has forced the government to make its first withdrawal from its $860 billion sovereign wealth fund this year as it spends more of the nation’s oil wealth amid dwindling income from petroleum production.
Statistics Norway said in its statement Wednesday that figures for accrued oil and gas investments and spending estimates had been revised upward for the period 2013-2017 because of under-reporting.