Norway oil companies face higher investment costs due inflation (updated)
16/11/2023 07:07
(Adds quotes, background)
OSLO, Nov 16 (Reuters) - Norwegian oil and gas companies
plan to invest more in 2023 and 2024 than previously thought as
inflation drives up the cost of field developments, a national
statistics office (SSB) survey showed on Thursday.
The country's biggest business sector now expects to invest
216 billion Norwegian crowns ($19.94 billion) in 2023, up from a
forecast of 213 billion made in August, SSB said.
Oil companies now plan to invest 232 billion crowns in 2024,
compared to a previous estimate of 207 billion.
"The higher estimate is mainly due to significant higher
reported cost estimates on some development projects," SSB said
in a statement.
"These increased costs will probably not contribute much
to expanded production capacity more than initially planned," it
added.
So far this year, there was only one plan for a new
field development submitted, after plans for more than 16
projects had been submitted in 2022 to take advantage of tax
incentives.
In September, Equinor EQNR.OL
submitted
a 4 billion-crown plan for development and operations (PDO)
for its Eirin gas discovery in the North Sea.
Development projects are only included in the investment
survey when a PDO is submitted to authorities.
SSB said weakening of the Norwegian crown against the
U.S. dollar and the euro reinforced the already high cost
inflation as measured in crowns.
($1 = 10.8304 Norwegian crowns)
(Reporting by Nerijus Adomaitis; Editing by Terje Solsvik)
((nerijus.adomaitis@thomsonreuters.com; +47 9027 6699; Reuters
Messaging: nerijus.adomaitis.thomsonreuters@reuters.net))