Oil investment seen cushioning Norway slowdown

By John Acher

OSLO, Sept 11 (Reuters) - Record high oil and gas investment
will help Norway weather the global economic slowdown better
than many other nations this year and next, though bottlenecks
may keep investment below forecast, economists said on Thursday.

Statistics Norway trimmed its estimate for 2008 investment
in the country's oil and gas industry on Thursday but said 2009
investment in the sector, which contributes a quarter of GDP,
would reach a record high of $24 billion.

"Norway is lucky -- we have oilfield shock absorbers," said
Knut Anton Mork, chief economist at Handelsbanken in Oslo. "And
that is our advantage compared to our neighbours in the Nordic
region and the rest of Europe."

DnB NOR senior analyst Kyrre Aamdal said: "As long as oil
prices are high, we expect the level of investment to stay high,
so that will dampen variations in total investment even though
investment in other sectors declines."

Norway is the world's fourth largest oil exporter and
Western Europe's biggest natural gas exporter.

The statistics agency trimmed its projection for total
petroleum investment this year to 128.2 billion Norwegian crowns
($22.57 billion) from a figure of 132.3 billion given in June.

It raised its 2009 oil and gas investment estimate to 132.8
billion crowns ($24.04 billion) from a June figure of 116.9
billion and said it was the highest level since the statistics
series began in 1985.

High oil prices have spurred petroleum activity around the
globe. Aamdal said the projection for investment growth was
probably too high because constraints in the overheated supplier
industry would keep real investment below the forecast.

The estimates tend to rise in early part of the year as
companies announce new investment plans, then level off and
sometimes are adjusted downwards if projects are delayed.

Petroleum investment in Norway has risen sharply in 2008
from 2007, but the estimated 2009 increase is more moderate.

"We have had very healthy growth in oil and gas investment
for some time, but it seems that it may be levelling out
somewhat," Mork said.

"There is a bit of levelling out here, we are seeing some
effects of the capital shortage, the credit crunch," Mork said,
but he noted that investment was stabilising at high levels.

Norway has enjoyed a five-year boom, driven by soaring
prices for its oil and gas exports and brisk domestic demand.
The mainland economy grew by a sizzling 6.2 percent last year,
but economists see growth slowing to around 3 percent this year.

"High investment activity is going to continue," Mork said,
but added oil and gas investment could peak next year or some
time in 2010-2012. "It will peak at a very high level."

Most of Norway's direct revenue from pumping oil and gas is
kept out of the economy since the government invests it in
foreign stocks and bonds held in a fund for future generations.

Indirect effects come through the supplier industry, which
includes shipyards, rig yards and other petroleum services.

Despite the weight of the oil sector, it has played a less
important role in the Norwegian boom than household demand fed
by borrowing, First Securities chief economist Harald Magnus
Andreassen said.

"The main reason we have had such fantastic growth in Norway
is falling savings and increased household credit, like in many
other countries, and that is not sustainable," said Andreassen
who said the new investment figures were below his expectations.

(Reporting by John Acher)