Norway looks to suffer its first drop in investment since 2010 due to ballooning costs and stagnating energy prices.
Oil and gas companies operating in western Europe’s biggest producer province expect investments to fall by 21% next year, according to Statistics Norway.
“Investments will reach a peak in 2014 and fall again in 2015,” the statistics office said. “The decrease is mainly due to significantly lower estimates of field development and fields on stream.”
Investments are expected to peak at 182.4billion kroner ($30.4billion) next year compared to this year’s 231.7billion kroner.
It would be the first dip in five years. Norway has seen investments more than triple in the past decade. Rejuvenated exploration and new discoveries fueled the steady influx of cash. However, Statistics Norway paints a bleaker picture for the year ahead.
Spending on field development is expected to drop 33% to 56.3billion kroner, according to the organisation.
But it added the downward slide could be tempered by Statoil’s Johan Sverdrup development. The Johan Sverdrup development is Norway’s biggest oil discovery in decades. Development is expected to start next year with first production due to start at the end of 2019.
Statoil, the country’s biggest oil and gas producer, is just one of the firms which plans to trim spending as rising costs hamper returns.
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