According to Statistics Norway, the country’s oil companies have increased their investment plans for 2017, which means that there would be a smaller contraction for the industry in the coming months.
The bureau’s survey reveals that Norwegian oil companies now plan to invest $17.87 billion in extraction and pipeline transport. This is 1.9% more than the amount in November last year.
Reporting what has driven this trend, Statistics Norway stated:
“The increase is mainly due to higher estimates for field development, fields on stream and shutdown and removal.”
The bureau also adds that the numbers were boosted by some removal projects that were postponed in the fourth quarter of 2016.
Now, the forecast is being viewed by experts as positive news for the country’s economy. Erik Bruce, an economist at Nordea Markets, said that it surpasses Norges Bank’s forecast by around 4-5% based on inflation-adjusted terms. He commented:
“It’s an argument in favor of the central bank lifting its interest rate path projections at the March meeting,… but not to the point of raising rates.”
In December, the central bank announced that it expects to keep interest rates at a record low of 0.5% in the coming years and said that it will be possible to see rate reductions than rate increases.
However, Statistics Norway still expects overall investments by oil companies in extraction and pipeline transport to fall for the third year in a row. This will be because of firms reducing spending after huge cuts in oil prices were imposed over the last two years.