Investment activity in the energy sector was lower than previous estimates. A modest increase in investments in the Norwegian oil and gas industry is expected, though pressures on the overall energy sector remain, the government said.
Norway is a main oil and gas producer and one of the central suppliers to the European economy, outside of Russia. Lingering strains from last year’s market downturn are catching up with Norway and production levels have been on a slow decline over the past few months.
In a profile on cash targeting the energy sector, the government’s statistics office said investment activity in oil, gas manufacturing, mining and electricity came in last year at $25.5 billion, which is 2.5 percent lower than projected in its previous survey.
“The investment level is 12.9 percent lower than the corresponding figure for 2015,” the government reported.
The government reported recent gains on the labor front for the oil and gas sector, though increases were coming off historic lows. Construction and communication trades were among the brighter spots for employment.
Despite short-term declines in overall oil and gas production, the government said full-year 2016 output was higher than the previous year, even as lower crude oil prices put negative pressure on the industry as a whole.
On what to expect for 2017, the government said investments in oil and gas extraction, as well as pipeline transport, were forecast at $17.8 billion, about 2 percent higher than previous estimates.
The government said recovery was coming from historic lows as investments declined 27 percent in the last two years alone. Investments peaked in the four-year period ending in 2014 because of persistently high oil prices. Despite improvements since late 2016, crude oil prices are still about half what they were three years ago.
“Because price adjustments are slow, there is reason to believe that the prices of input factors in the extraction business did not decrease until 2016, and will further decrease in the present year,” the government stated.