Norwegian oil and gas companies plan to invest more in 2023 and 2024 than previously thought as inflation drives up the cost of field developments, a national statistics office (SSB) survey showed on Thursday.

The country’s biggest business sector now expects to invest 216 billion Norwegian crowns ($19.94 billion) in 2023, up from a forecast of 213 billion made in August, SSB said.

Oil companies now plan to invest 232 billion crowns in 2024, compared to a previous estimate of 207 billion.
“The higher estimate is mainly due to significant higher reported cost estimates on some development projects,” SSB said in a statement.

“These increased costs will probably not contribute much to expanded production capacity more than initially planned,” it added.

So far this year, there was only one plan for a new field development submitted, after plans for more than 16 projects had been submitted in 2022 to take advantage of tax incentives.

In September, Equinor EQNR.OL submitted a 4 billion-crown plan for development and operations (PDO) for its Eirin gas discovery in the North Sea.

Development projects are only included in the investment survey when a PDO is submitted to authorities.

SSB said weakening of the Norwegian crown against the U.S. dollar and the euro reinforced the already high cost inflation as measured in crowns.
Source: Reuters (Reporting by Nerijus Adomaitis; Editing by Terje Solsvik)