Exploration investment on Norwegian Continental Shelf expected to double

Oil and gas exploration investment on the Norwegian Continental Shelf is expected to double through 2005 to 9 bn kroner (EUR 1.1 bn, $ 1.5 bn), the nation's statistics office said.
The resumption of drilling that was delayed because of a strike among oil rig workers, the government's decision to issue more licenses for exploration beneath the Barents Sea and higher oil prices this year were touted as the main reason behind the forecast, the agency said.

Oil prices peaked at $ 55.17 a barrel twice in October. They fell below $ 45 a barrel, after US inventory data eased fears about a supply crunch during the Northern Hemisphere winter, but remain about 50 % higher than a year ago.
With daily exports of about 3.2 mm barrels, Norway is the world's third-largest oil exporter after Saudi Arabia and Russia. Investments in the search for oil and gas are expected to come to about 4 bn kroner (EUR 488.9 mm, $ 651.3 mm) this year.

High oil prices have caused many companies to raise their hurdle rates, or the oil price assumptions they base their investment decisions on, from around $ 18 a barrel to between $ 22 and $ 24 a barrel.
That, analysts have said, has opened up previously unavailable opportunities -- including satellite fields -- and investment on the shelf is expected to reach new highs next year and through 2006.

The statistics bureau also increased its total petroleum investments forecast in oil and gas activities for 2005, including pipeline transportation, to 89.5 bn kroner (EUR 10.9 bn, $ 14.5 bn), some 26.3 bn kroner (EUR 3.2 bn, $ 4.2 bn) more than this year.
"This is the highest estimate given, measured in current prices, since Statistics Norway started collecting estimates in 1985," the agency said.

The projected increase for 2005 is also because of investments in projects related to Ormen Lange, Norway's largest natural gas project that is scheduled to become operational in 2006 and 2007.
Earlier this month, Statoil said it would step up its exploration activity on the continental shelf, planning as many as 20 new wells that would more than double its activity this year.