Dec. 14 (UPI) -- Lower industry prices, an improved global economic outlook and higher oil prices suggest a period of decline in petroleum investments is over, Norway said.
Norway holds the largest crude oil and natural gas reserves in Europe and exports nearly all of what it produces offshore. The decline in crude oil prices last year put pressure on the economy, though the government said Thursday the downturn appeared to be over.
"The oil price has been rising by degrees from the end of 2016, when it dipped below $30 per barrel, to the current level of over $60 per barrel," a government report for the fourth quarter read. "Coupled with an improved global outlook and lower investment prices, this augurs well for increased petroleum investment."
The price for Brent crude oil, the global benchmark, was around $62 per barrel early Thursday.
The government said investment commitments for projects like the Johan Sverdrup field in the North Sea point to clear signs of growth for the petroleum industry. Contracts worth more than $5.7 billion have been awarded for the project so far and most of those have gone to companies in Norway.
At peak capacity, Johan Sverdrup should account for up to 25 percent of total Norwegian petroleum production. At least two other major field developments are expected to be sanctioned in the near future.
"The weak trend in petroleum investment since 2013 therefore appears to be giving way to a new upturn," the government said.
Consultant group Wood Mackenzie said oil and gas companies are looking to start 2018 in their best footing since oil prices collapsed in early 2016. Some of the largest energy companies in the world, a category that includes Norwegian major Statoil, were tightening the purse strings and shedding assets. That period is over, the group said.
"We believe the big cuts are over," Angus Rodger, the director of research in exploration and production, said in an emailed statement. "Wood Mackenzie expects global capital expenditure to grow slightly in 2018 to a total of $400 billion."
Norway, however, said it may be facing some economic pressure in the quarters ahead. The growth in gross domestic product has been just under 2 percent, a level indicative of healthy growth, for the past three quarters. Compared with previous periods of growth, the government said the pace has been only slightly better.
Statistics Norway, the government's record-keeping agency, said this week that a weakened Norwegian krone against the U.S. dollar contributed to some of the economic pressure, a sentiment verified in the fourth quarter report.
In a decision announced Thursday, Norway's central bank said it was keeping its key policy rate unchanged at 0.50 percent.