Norway expects steep drop in rig activity

OSLO, Norway, Nov. 24 (UPI) -- There should be a steep drop in the number of rigs deployed for exploration of oil and gas reserves offshore Norway, national statistics show.

Lower crude oil prices are influencing exporting and importing nations alike. For Norway's citizens, the number of jobs in the energy sector decreased by half from third quarter 2014 to third quarter 2015.

Data gathered by Statistics Norway find total investments in oil, gas, manufacturing, mining and electricity for 2015 so far are $27.4 billion, down 9.4 percent year-on-year. For oil and gas alone, the year-on-year decline was 11.8 percent.

Brent crude oil, the global benchmark price, is about 45 percent lower than this time last year. The decline acts as a form of economic stimulus for national economies that import most of their sources of energy, but depresses economies like Norway that depend on revenue from oil and natural gas sales.

Economic growth has been slow for most of the year for Norway, with gross domestic product increasing by slightly less than 1 percent for the past four quarters combined.

For October, oil field services company Baker Hughes finds the number of rigs deployed internationally are down 2.5 percent year-on-year. Rig counts serve as a barometer for the health of the upstream energy sector, the part of the industry focused on exploration and production.

Statistics Norway said rigs serve as the "most important input factor" when considering upstream strength.

"Due to low oil prices and operators' processes to cut rig costs, the number of active rigs on the Norwegian Shelf is expected to decrease in 2016," it said. For next year, the government body said there should be a "sharp decline" in the upstream sector.