Norway's upstream sector will see a recovery in 2017 with changes in exploration activities and large final investment decisions, a new report by Wood Mackenzie showed late Wednesday.
Investment in the Norwegian upstream sector fell to a ten-year low in 2016 as exploration was disappointing and large final investment decisions continued to be deferred in the main due to low oil prices.
"But there were rays of light. Companies were able to significantly cut costs,and production remained high," the report read.
“While we haven't witnessed a full recovery, at least the sector is up and out of bed. Against the backdrop of a rising oil price, this recovery is set to continue into 2017," Neivan Boroujerdi, Norway analyst at Wood Mackenzie said.
Wood Mackenzie expects that volumes discovered in Norway in 2017 will be at their highest since 2010.
“There will be an increase in the number of wells and - more importantly - a clear shift towards high-impact activity as companies go elephant hunting again. Norwegian wells will be watched globally," Boroujerdi said.
Boroujerdi noted that out of the 35 exploration wells Wood Mackenzie expects to drill offshore Norway in 2017, over a third will be in the Arctic Barent Sea.
“We could also see a continuation of the creative corporate equity deals we saw in 2016, which allowed cash-conscious buyers to acquire high quality assets," Boroujerdi noted.
According to the report, large European based-independents are expected to lead the change for buyers.
By Murat Temizer