A new report by analyst firm Rystad shows that Norway is leading the comeback after a sanctioning drought in the offshore industry in 2015 and 2016.
|Johan Castberg. Illustration from Statoil.|
Recent projects submitted to the Norwegian Petroleum Directorate (NPD) show a clear turnaround in the offshore industry and make Norway the largest contributor to offshore project commitments in 2017.
“Oil field service companies have been squeezed quite tightly for the past few years, but the developments in 2017 in Norway and elsewhere show the future is brightening for offshore service suppliers,” says Audun Martinsen, Vice President of Oil Field Service Research at Rystad Energy.
Seven field development plans were submitted to the NPD in December with a total value of more than US$12.5 billion (NOK100 billion) in greenfield capex. Earlier in 2017 projects like Njord Future and Bauge were also sanctioned. The December spree made Norway the largest contributor to offshore developments in 2017 with $18 billion worth of projects committed to, followed by the US and Mozambique.
“It is remarkable that Norwegian E&P operators are turning the tide of the offshore industry, given all the negative focus on cost cuts and layoffs in Norway. Finally Norway’s industry is coming back to full throttle,” Martinsen says.
On December 5, Statoil handed in the plans for approval of the Johan Castberg project valued at approximately $5.9 billion (NOK49 billion). On December 15, AkerBP handed in three plans for Aerfugl, Valhall West Flank and Skogul. And, just before Christmas three oil companies handed in plans for development: Repsol for Yme New Development, VNG for Fenja, and Statoil for the Snorre Expansion project.