OSLO Feb 23 Norway's oil companies have
increased their 2017 investment plans in the last three months,
signalling a smaller-than-expected contraction for the industry,
a survey by the statistics office showed on Thursday.
Investments in oil and gas extraction and pipeline transport
were still expected to fall for the third year in a row as
companies cut the spending after oil prices fell by more than 50
percent over the last two-and-a-half years.
The country's oil companies now plan to invest 149.4 billion
crowns ($17.87 billion) next year in oil and gas extraction and
pipeline transport, 1.9 percent more than the 146.6 billion
crowns seen last November but down from 163.3 billion in 2016.
"The increase is mainly due to higher estimates for field
development, fields on stream and shutdown and removal,"
Statistics Norway said in a statement.
The numbers were helped by some removal projects being
postponed from the fourth quarter to 2017, it added.
The 2017 forecast should be viewed as positive news for the
economy, Nordea Markets economist Erik Bruce said, adding it was
probably 4-5 percent ahead of the central bank's forecast when
measured in inflation-adjusted terms.
"It's an argument in favour of the central bank lifting its
interest rate path projections at the March meeting,... but not
to the point of raising rates." he added.
SEB economist Erica Blomgren also said the survey was
positive for the economy.
"The central bank's forecast (for 2017) may turn out to be
too pessimistic," she added.
The Norwegian central bank said in December it expected to
keep interest rates steady at a record low 0.5 percent in the
years ahead, but added the probability of a rate cut was greater
than the chance of a hike.
Over the last two years oil and gas investments contracted
by 27 percent, after rising by 70 percent from 2010-2014 when
high and relatively stable oil prices supported new developments
and high drilling activity offshore Norway.
The Norwegian oil and gas industry's share of gross domestic
product (GDP) contracted to 12 percent in 2016 from 25 percent
at its peak in 2008.
The crown cutrrency strengthened marginally against the euro
on Thursday, trading at 8.8205 at 0820 GMT against
8.8294 ahead of the 0700 GMT publication.
($1 = 8.3614 Norwegian crowns)
(Reporting by Nerijus Adomaitis and Ole Petter Skonnord,
editing by Terje Solsvik)