STAVANGER, Norway, Nov. 11 (UPI) -- The world economy remains fragile and, with oil prices at historic lows, investments in the Norwegian energy sector may be tempered, an industry group said.
The Norwegian Oil and Gas Association, the industry's lobbying group in the country, said costs of working offshore have risen "substantially" since 2004. That, in turn, has led to a reduction in the number of developments on the Norwegian Continental Shelf.
The group it expected total capital spending in the offshore sector to fall from $32.5 billion in 2014 to just over $29 billion per year in 2019.
"We assumed that 2014 would be a peak year because a number of the large producing fields on the continental shelf were then set to complete their biggest modifications," Bjorn Harald Martinsen, manager for economics at the Norwegian Oil and Gas Association, said in a Tuesday statement. "The current decline in investment therefore represents to a great extent an anticipated correction."
Oil prices since June have shed about 20 percent of their value. They've reached a point where energy companies may find it too expensive to continue producing at their current rates.
The industry group said it drafted its annual report on the Norwegian energy sector with the assumption that the world economy is still fragile six years after the global recession and at a time when oil prices are at their lowest level in four years.
Norway has more oil reserves than any other European country. Last year, it exported 1.19 million bpd worth of oil, with most of that headed to the British and Dutch economies.
In terms of gas, it's the third largest exporter in the world behind Russia and Qatar.
