Norwegian oil and gas companies raise their investment forecasts for 2022

  • 2022 investment f’cast increased by 4.8% to NOK 167 billion
  • Pandemic-era tax relief to boost plans for years to come
  • High oil investments support rate hikes in Norway

OSLO, May 27 (Reuters) – Norwegian oil and gas companies have raised their investment forecasts for 2022, taking advantage of high oil prices and tax incentives to boost activity, a National Oil and Gas survey showed on Friday. statistics (SSB).

Norway’s largest business sector now plans to invest 167.2 billion Norwegian kroner ($17.57 billion) in 2022, up from a forecast of 159.5 billion kroner made in February, SSB said. Read more

“The upward adjustment for 2022 is driven by higher estimates in the field development, onshore activity and exploration and concept studies categories,” the agency said in a statement.

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Preliminary forecasts for 2023 foresee an investment of 130.6 billion crowns, compared to 131.4 billion crowns forecast three months ago. The forecast, however, remains subject to significant revisions as further plans are prepared over the coming quarters.

“The new developments will significantly increase the estimate for 2023,” SSB said.

Led by state-controlled Equinor (EQNR.OL) and a series of foreign and domestic companies, the overall production of the Norwegian oil industry amounts to around 4 million barrels of oil equivalent per day, making the country the largest producer in Western Europe.

In 2020, the Norwegian parliament approved temporary tax incentives to support oil and gas investments in the face of a collapse in oil demand due to the pandemic.

The incentives are due to end this year and companies must approve new projects before this deadline to benefit from them.

“It is expected that a very large number of development and operating plans (PDOs) will be submitted to the government this year; the vast majority of them in December,” SSB said.

The expected investments will give a boost to the economy, supporting the Norwegian central bank’s push for higher interest rates in the time ahead, Handelsbanken wrote in a note to clients.

“All signals so far point to a strong rebound in oil investment in 2023-24,” the bank said.

($1 = 9.5144 Norwegian kroner)

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Reporting by Terje Solsvik Editing by Jan Harvey and David Goodman

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