Norwegian oil investment is expected to hit a peak by 2015, with more than £17.5billion to be spend on projects across the Norwegian continental shelf next year.
But production is expected to fall across the NCS over the next decade, despite the country raising its resources estimate based on potential riches in the Barents Sea.
New figures from the Norwegian Petroleum Directorate predict heavy investment in the Norwegian shelf will continue for at least the next two years before decline begins.
Investment for 2014 is expected to reach 176billion Norwegian krone (£17.5billion), 3billion krone more than 2013’s spending, before rising to 180billion krone in 2015.
However, that number will drop off to around 170billion krone over the following three years to 2018.
The figures come just days after new figures from consultancy Wood Mackenzie predicted a similar spending pattern for projects on the UK continental shelf.
Production levels for 2014 are expected to be in line with 2013, with a 0.5% increase, before the levels of increase decline during the next decade.
Despite this falloff in production, the head of the Norwegian Petroleum Directorate said companies must continue to support the region’s potential, particularly with the Barents Sea projects in the pipeline.
“The work to coordinate the resources and improve the recovery rate on the shelf has greatly benefited both the companies and the Norwegian State,” said Bente Nyland.
“Concerns over the cost level and oil prices must not prevent us from making decisions that will secure our income base for many years to come.”
Undiscovered resources across the shelf are thought to be around 18.5billion barrels of oil equivalent, with at least 13 new projects due to be submitted for development over the next two years – nine of which would be in the North Sea.
Despite the increase in petroleum tax by the Norwegian government having slowed down investment in projects such as the giant £10billion Johan Castberg field, Nyland said the Barents Sea could still unlock substantial riches for oil firms in the country.
“The discoveries in recent years have created renewed interest in the Barents Sea, which could come to play an important role in maintaining long-term petroleum production,” she said.
Analysts Wood Mackenzie described 2014 as a key year for Norway’s oil and gas industry, with Statoil’s portfolio sell-off opening the door to new investors in the region.
“M&A spend could be set to surpass record levels, with the trend for larger companies to optimise their portfolios continuing, meaning there will be plenty of potential deals, with Talisman Norway, RWE Dea and Marathon Norway – just three of the portfolios up for sale,” said the firm’s Norway analyst Malcolm Dickson.
“Norway will also see significant developments in 2014 with projects such as Johan Castberg, Johan Sverdrup and Goliat on track to reach crucial milestones in terms of their development.
“The impact of the 2013 petroleum tax on marginal projects will also become clearer, with a full list of developments that qualify for transition terms expected from the Norwegian government this year.”
