* Norway oil investments to drop in 2017, 2018 -lobby group
* Sees slight uptick in 2019
* Investment decline set to continue in 2020, 2021
* Estimates based on $50/barrel oil price
* If oil hits $70, investment seen largely flat vs 2016
(Adds more forecasts, bullets, background)
By Stine Jacobsen
OSLO, Dec 12 Norway's oil and gas sector faces
another two years of falling investment as the industry's
downturn lasts longer than expected, a lobby group forecast on
A 50 percent drop in crude prices to around $57 per
barrel since mid-2014 has lead oil firms to tighten spending and
postpone or cancel projects.
Investments in 2017 are expected to fall by seven percent to
143 billion Norwegian crowns ($16.93 billion) from 154 billion
crowns in 2016 and decline further to 131 billion in 2018, the
Norwegian Oil and Gas Association estimated in a report.
In 2015, the oil and gas industry accounted for 15 percent
of Norway's gross domestic product, for around 20 percent of the
state's total revenues and 39 percent of Norwegian exports,
according to the country's oil ministry.
"Last year's report predicted that 2017 would be a turning
point for renewed investment growth. However, a lower level of
costs and less optimistic price expectations mean the present
view is that capital spending will level off over the next few
years," the Oil and Gas Association said.
A small rebound was forecast for 2019, to 137 billion
crowns, due to the development of the giant Johan Sverdrup
oilfield in the North Sea, but investments were then seen
falling again in 2020 and 2021 to 127 billion and 126 billion
The forecasts were all measured in inflation-adjusted
2016-level crowns, and based on an oil price forecast of around
$50 per barrel, resulting in an average 130 billion crowns
annual investment level from 2018-2021.
Should the oil price rise to $70 per barrel, investments
after 2018 "could be at around 140 billion crowns per year," it
Following cost-cuts and redesigns, oil companies, including
top producer Statoil, have recently presented plans for
some oilfield developments and said more may come in 2017.
The industry association saw signs of a tighter market for
oil, and expected the balance between supply and demand to shift
in 2017, not least thanks to the recent promise of output cuts
by OPEC and some non-OPEC countries.
In November of last year the lobby had anticipated that oil
and gas investments, as measured in 2015 crowns, would fall to
132 billion in 2017 from 149 billion in 2016 and then pick up
from 2018 and onwards.
($1 = 8.4488 Norwegian crowns)
(Editing by Terje Solsvik and Alexander Smith)