Friday, 17 January 2014

Norway's rising oil costs hit Arctic output hopes

RT @Northern_Clips: Rising #costs & #taxes, falling #oil prices scuttle #Norway 's #Arctic oil & #gas projects Reuters

Norway's rising oil costs hit Arctic output hopes


* Cost rise, tax hike squeezes margins

* Frontier projects, small developments at risk

* Oil prices seen coming down

* Investment growth to stop, then fall

By Henrik Stolen, Gwladys Fouche and Joachim Dagenborg

OSLO, Jan 16 (Reuters) - Delays to flagship Arctic projects due to sharply higher costs and taxes, and lower oil prices, will hamper Norway's efforts to revive oil output stuck at a 25-year low, officials and companies say.

The development of several smaller fields, which often fly under the radar, is also either delayed or in doubt, the Norwegian Petroleum Directorate (NPD) told Reuters.

Cost in Norway's oil sector have roughly doubled between 2005 and 2012 and a tax hike unveiled last year pushed several projects over the edge just as oil firms around the globe increased efforts to reduce spending to save cash for dividends.

Norway expects oil investments to grow just 2 percent this year and next, a big drop from a decade of double-digit growth rates. It also cut its oil output forecast for the year.

"The problem is that we (as an industry) are too expensive and make too little profit," Mads Andersen, the Norwegian country chief of oil services firm Cameron said...."

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