But exports of crude oil and natural gas fall even as next year’s projected outlay for petroleum sector contracts, reports Team IFM
Oslo, June 20: Norway’s exports of crude oil and natural gas, the mainstay of its economy, fell in May even as its overall shipment value rose to $5.4 billion on the back of higher exports in most commodity groups, according to official data.
However, exports of crude oil and natural gas fell by 10.5 and 12.6 percent respectively, it added.
Statistics Norway, the country’s official data office, also released data earlier this week that showed investments in the oil and gas sector will plunge in the coming year, goading economists to say this indicated the economy was not developing well.
The data office said mainland exports in May amounted to NOK 32.6 billion or about $5.4 billion, an increase of 11.9 per cent compared to May 2013. Higher exports in major commodity groups contributed to the increase.
DNB Markets economist Kyrre Aamdal told Reuters the survey data clearly indicated Norway had reached a peak in oil investments, and that the economy would take a hit from a negative development in 2015.
“Today’s figures support the view that the Norwegian economy is not developing so well, and the central Bank may have to cut its growth forecast,” Aamdal was quoted as saying.
SUBDUED EXPORTS
Meanwhile, the data department said, exports as a whole declined by 3.3 percent to NOK 70.3 billion even though most of the major commodity groups contributed to the rise in mainland exports.
“This decrease was due to lower exports of crude oil and natural gas, which in turn was caused by offshore maintenance,” Statistics Norway said.
Imports of goods decreased by 1.5 percent from May 2013 and amounted to NOK 43.5 billion in the month under review.
The export value of crude oil amounted to NOK 20.6 billion in May, a decrease of 10.5 percent compared with the same month last year. The data office said the decrease was due to a lower export volume – 31 million barrels were exported in May this year compared to 38 million barrels in May 2013.
The low volume is linked to planned maintenance on offshore platforms, typically performed during the summer months. The price, however, ended at NOK 659 per barrel, which is NOK 61 more than the same month the previous year.
Natural gas valued at NOK 16.7 billion was exported in May, Statistics Norway said, explaining this was a decrease of 12.6 percent compared with the same month last year.
The export volume of natural gas in a gaseous state totalled 8.1 billion cubic metres. This is a decrease of 5.2 per cent since May last year, the data office added.
MAINLAND GROWTH
The boost came from mainland exports, which expanded by 11.9 percent, and amounted to NOK 32.6 billion in May, with the majority of the main commodity groups increasing, compared to May 2013.
The main commodity group, comprising miscellaneous manufactured articles, increased the most to move up from NOK 1.9 billion in May 2013 to NOK 2.4 billion a year later. This corresponds to an increase of slightly more than NOK 0.5 billion, Statistics Norway said.
The sub-group professional and scientific instruments increased the most, by NOK 400 million from May 2013. Among the other groups, chemical and related products rose by NOK 434 million and amounted to NOK 3.5 billion in May 2014.
Of the sub-groups here, chemical materials and products in addition to medical and pharmaceutical products contributed most to the growth. These groups increased by NOK 279 million and NOK 112 million respectively.
Otherwise, exports of fish increased by NOK 216 million and amounted to NOK 5 billion from May 2013 to 2014. The increase this time is mainly due to more exports of salmon fillets. Exports of refined petroleum products increased by 38.9 per cent to NOK 5.2 billion in May.
LOWER IMPORTS
Helping the trade surplus expand was shrinking value of imports with Norway importing goods with a total value of NOK 43.5 billion in May, a decline of 1.5 per cent compared to the year-ago period.
The main commodity group – chemical and related products – saw an increase of more than NOK 600 million in May to balloon to NOK 4.6 billion. “There was a relatively steady increase in all sub-groups here,” Statistics Norway observed.
Organic and inorganic chemical products increased the most, with NOK 219 million and NOK 180 million respectively, it said.
The greatest decline was in the group machinery and transport equipment, which amounted to NOK 16.5 billion in May. This is just under NOK 1 billion or 5.6 per cent lower than in May 2013.
Despite a rise in most of the sub-groups, the sub-group other transport equipment dragged the group down as a whole. As a result, the group’s performance as a whole witnessed a decline of NOK 1.7 billion.
“The sub-group other transport equipment can vary widely from month to month as it contains goods such as ships and aircraft,” the data office explained.
OIL INVESTMENTS
In another development, Statistics Norway, released data that showed investments in the oil and gas sector, a key to economic growth, will nosedive in 2015.
“Total investments in oil and gas activity in 2015, including pipeline transportation, are NOK 182.4 billion in the preliminary estimate,” it said in a statement, adding: “The estimate for 2014 has gone up NOK 8 billion to NOK 231.7 billion.”
This is a 12 percent drop compared with the initial estimate for 2014, and the lowest comparable level since 2012.
“This is a significant draw-down on Norwegian growth,” Nordea Markets economist Joachim Bernhardsen said of the 2015 investment plans. “[It] suggests a lower interest rate path,” Reuters quoted him as saying.