Norwegian oil and gas companies are revising their investment plans for 2023 and 2024 upward due to inflationary pressures impacting the costs of field developments, according to a survey by the national statistics office (SSB) released on Thursday.
The latest projections indicate that the country’s prominent oil sector plans to invest 216 billion Norwegian crowns ($19.94 billion) in 2023, up from the previous estimate of 213 billion made in August. Looking ahead to 2024, oil companies are now planning investments of 232 billion crowns, a significant increase from the earlier estimate of 207 billion, according to Reuters.
In September, Equinor (EQNR.OL) submitted a 4 billion-crown plan for the development and operations (PDO) of its Eirin gas discovery in the North Sea. The investment survey only incorporates development projects when an official PDO is submitted to the authorities.
The survey by SSB highlighted that the depreciation of the Norwegian crown against the U.S. dollar and the euro has compounded the existing challenges of high cost inflation, particularly when measured in crowns. The ongoing economic dynamics underscore the complex landscape faced by Norwegian oil and gas entities as they navigate evolving market conditions.
Note: Exchange rate used – $1 = 10.8304 Norwegian crowns.