Cost rises lead Norway's oil producers to hike investment forecasts

OSLO, May 25 (Reuters) — Cost inflation has led Norwegian oil and gas companies to increase their investment forecasts for 2023 and 2024, a national statistics office (SSB) survey showed on Thursday.

The country’s biggest business sector expects to invest 197.8 billion Norwegian crowns ($18.86 billion) in 2023, up from a forecast of 187.8 billion made in February, SSB said.

“There have been no new projects (added since the previous survey), so the increase is in already existing fields… Some of the increase in the estimate is related to the growth in the prices of many investment goods,” SSB added.

Official statistics showed investment costs in the petroleum sector increasing by 8.1% in the first quarter from a year earlier.

SSB also said the weakening of the Norwegian crown against U.S. dollar and euro had reinforced price increase measured in crowns.

Oil companies also raised their investment forecast for next year to 181.9 billion crowns, from an initial estimate of 178.6 billion in February.

Oil companies rushed to approve new projects by the end of 2022, when Norway’s temporary tax incentives to support offshore investments expired.

Since few new projects are expected to be delivered in the next couple of years, the indicated growth estimated for 2024 should be interpreted with caution, SSB said.

($1 = 10.4882 Norwegian crowns)