(Updates with economist comment from fourth paragraph.)
Dec. 1 (Bloomberg) -- Norway expects the petroleum industry to invest a record amount next year amid new field developments, shielding the economy from the fallout of Europe’s debt crisis.
Oil and gas companies expect to invest 184.6 billion kroner ($32 billion) next year, a quarterly survey from Norway’s statistics agency showed today. That’s up from a September estimate of 172 billion kroner. Spending will be 152.6 billion kroner this year, little changed from the September estimate.
Norway, the world’s seventh-largest oil exporter and second-biggest natural gas exporter, has so far been shielded from the worst of the debt crisis and boasts surpluses and unemployment below 3 percent. Increased oil investments will underpin economic growth next year, even as global prospects worsen, Stein Bruun, chief economist in Oslo at SEB AB.
“We will have a booming investment in the oil sector in Norway both this year and next,” Bruun said. “It will add important demand impulses to the Norwegian economy and damp the blow from the weaker cycle in Europe.”
Norway’s overall economy will accelerate to 3 percent next year from 1.5 percent this year, the central bank forecasts. Petroleum accounted for about a fifth of gross domestic product and 26 percent of total investments in 2010, according to the Energy Ministry. The industry accounted for 47 percent of total exports last year.
“Gas is sold on long-term contracts and the volume of such exports is little affected by relatively short-term swings in activity,” Bruun said. “Oil exports are constrained by production at the Norwegian shelf.”
Norway’s central bank shelved planned interest rate increases in October because of a deepening debt crisis in Europe. Policy makers signaled they will keep the benchmark unchanged until the second half of next year even as house prices rise and credit growth accelerates.
Increased petroleum investments in 2012 are mainly due to a high crude oil price, new discoveries, and maturing fields, Statistics Norway said in its report. “The oil companies have extensive drilling plans, both within production and exploration,” the office said. “Production in many fields is falling, and many platforms are old. These facts necessitate upgrading on a large scale.”
Prices for Brent crude, a Benchmark in Europe, have increased 15 percent this year, and traded at $109.23 a barrel by 12:43 p.m. in Oslo.
Investments in exploration are estimated at 32.4 billion kroner in 2012, which is unchanged from the previous estimates, the statistics agency said.
“The celebrated discoveries earlier this year contribute to a greater will to invest in exploration,” SSB said. “A shortage of rigs and a strong demand to use the same rigs for production drilling restrict the exploration plans.”
Statoil ASA, country’s biggest oil and gas producer, and Lundin Petroleum AB, made two major offshore finds in Norway this year that are linked into a single deposit. Aldous Major South and Avaldsnes in the North Sea are part of one “giant” oil field, and among Norway’s top 10 discoveries, the country’s biggest oil and gas producer said in August.
--Editors: Jonas Bergman, Tasneem Brogger
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