After a difficult period, it starts to fluctuate again for Norwegian oil companies again. – Can be cramped in the door in two or three years, warns chief economist.
A year ago today, the oil price was below $ 30 per barrel of North Sea oil, and a full-scale oil price war had recently broken out between Russia and Saudi Arabia. At one time there was so much oil in the market and so little demand, that prices for a short time in April were negative – that one had to pay to get rid of the oil.
A little over a year later, everything looks much brighter:
- More than two out of three in the oil industry – 68 percent – envisage hiring more people in the coming months.
- 72 percent believe in higher turnover.
- 68 percent believe in more to do in the future.
It appears in the recent business cycle barometer of Sparebank 1 SR-Bank, which is the temperature gauge for the business community in southern Norway. 600 business leaders have spoken, and companies with a third of revenues from oil and gas or more, are markedly more positive for the future than those without oil revenues.
– The tax package from the Storting has ensured that fewer projects have been postponed, at the same time as the oil price has risen again. These companies are also doing more towards renewable energy than before, explains chief economist Kyrre Knudsen.
THE ECONOMIC BAROMETER FOR SOUTHERN NORWAY, MAY 2021
- The majority – 57 percent – of the surveyed business leaders believe in an increase in the next twelve months. 67 percent believe in increased turnover and 59 percent will hire.
- The industries that are most optimistic are industry (64 per cent), trade in goods (61 per cent) and construction (57 per cent).
- The companies in Rogaland (58 per cent) are most optimistic for the next twelve months, followed by Vestland (57 per cent), Agder (55 per cent) and Oslo (54 per cent).
In the survey, 600-800 companies were asked about their expectations for turnover, profitability, investments, order backlog and man-years for the next three months and twelve months.
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The seas: Towards the shopping party of all time: – Norway has not come out of the yapping era
Will employ up to ten people over the next three months
Offshore supplier Imenco in Tysvær in Rogaland delivers tailor-made products and services to the oil and gas industry, renewables, aquaculture and other industries. CEO Geir Egil Østebøvik says that the fall in oil prices and the effects of covid-19 are beginning to subside, and that Imenco is definitely looking positively at the time ahead.
– Yes, we will hire between five and ten new people in the coming months if things continue as they are now, says Østebøvik satisfied.
The oil price has been stable between 50 and 70 dollars a barrel since December, and this week the price has been 68-69 dollars per barrel. It is absolutely perfect, says the Imenco director.
– When the oil price goes above 70 dollars a barrel, there is suddenly shale oil bonanza in the US, and then you can just wait for a stool. When it is below 50 dollars a barrel, the activities quickly slow down, says Østebøvik.
Like several other traditional oil suppliers, Imenco has started the restructuring. It is only a few years since everything was about oil and gas. The Tysvær company now delivers a wide range of products for aquaculture, the Armed Forces and renewable energy. The director is most enthusiastic when it comes to offshore wind.
– Renewable energy at sea will be important in the future with regard to increased activity. We have already positioned ourselves with two to three products, and we envisage expanding the product range in the future, says Østebøvik.
Recently, his company won a contract out of the ordinary: Imenco will secure and move three Viking ships and other objects worthy of protection to the new Viking Ship Museum on Bygdøy. The agreement is worth NOK 70 million and extends over just over three years.
The seas: Crisis figures for oil studies: – Doomsday prophets scare the youth
High speed in the oil industry can lead to price pressure
Oil giants like Equinor, Lundin and Aker BP in turn delivered very good figures in terms of turnover and profit recently.
High activity and high speed are usually positive, but can quickly become a problem if costs go up and the industry loses its footing – as many describe the situation in 2012 and 2013 before the oil crisis. This was also warned by Equinor CEO Anders Opedal during the quarterly presentation at the end of April.
– It is smart to take the discussion already now. One can quickly get a ketchup effect where many initiate large plans that take up a lot of capacity. Then it can quickly become cramped in the door in two or three years, warns chief economist Knudsen.
And while the oil industry is overwhelmingly positive for the coming months, Norwegian companies as a whole are also positive for the future. But are they too optimistic? No, says the chief economist – who has found a whimsical trend in the recent survey.
– This is the first time I have seen that companies have lower expectations of themselves than of competitors. This is not a sign of over-optimism, and it seems that the answers they give are well-founded and relatively neutral, says Knudsen.
Also read: The company of Knut Roar (41) on European prestige list: – Surprised
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