Norway's oil spending set to increase

Investment in Norway's oil and gas sector is set to continue in 2010 after an expected 17 % surge this year to a record NOK 145.2 bn (EUR 16 bn), Statistics Norway said.
In its quarterly forecast based on announcement already made by companies active offshore Norway, the statistics agency raised its 2009 investment view by 5.7 % from March. It forecast preliminary 2010 oil and gas investment at NOK 136.1 bn.

This -- the first forecast for 2010 -- is set to rise as companies announce new plans, and is well above the NOK 116.9 bn the agency gave for 2009 at the same time last year.
"The sharp increase is mainly due to the fact that the operators' first-time reports for 2010 are significantly more complete than earlier first-time reports," Statistics Norway said.

Norway is the world's sixth largest oil exporter and Western Europe's biggest natural gas exporter but a sharp fall in oil prices in late 2008 and in the first months of this year cast doubt over whether its investment boom would continue in 2010. The Norwegian Petroleum Directorate has said most of Norway's producing fields are robust at an oil price of $ 50 per barrel to $ 70 per barrel and a dip below that level a few months ago forced a number of oil and gas producers to postpone projects.
"The figures were pretty high," said Steinar Juel, chief economist at Nordea in Oslo. "It gives the impression that there could be growth (in investment spending) next year."

Norway needs to maintain high investment spending to limit the drop in output from its ageing North Sea oilfields.
According to official forecasts, Norway's oil output is expected to dip to about 2 mm bpd in 2009, while sales of natural gas this year are expected to rise to a record 102 bn cm.