Investments on the Norwegian Continental Shelf - An Empirical Analysis
Helge Sandvig Thorsen,
Inger Ubbe and
Bjørnar Andreas Kvinge
No 7370, CESifo Working Paper Series from CESifo Group Munich
Investments in oil and gas fields are regressed against variables on panel field-data from the start of oil and gas production on the Norwegian continental shelf in 1968 until 2016. Two alternative models track the observed investments aggregated across fields from 1970 until 2016 relatively accurately, except for the period 2012-2015. These years were marked by an almost world-wide recession in the aftermath of the financial crisis in 2008 and by the increase in production of shale-gas in the US. However when using data until 2010 in the estimation of the model, the fixed effect regression predicts rather accurately the development of aggregated across fields from 2011-2016. By using data only from 1995 until 2016 in the estimation of the fixed effect model the observed development after 2011 is also well tracked. The models imply rather strong and significant effect of the lagged oil price (Brent Blend) on investments. When data for the shorter period 1995-2016 is used, we get significant asymmetric price effects on investments, implying that an increase in the oil price has more positive effects on investments in periods with rising oil prices. In periods with declining prices the price history has a rather strong dampening impact on the effects of prices increases on investment. We also find strong and significant negative effects of lower expected remaining reserves on investments.
Keywords: oil and gas investments; prices of oil; panel-data (search for similar items in EconPapers)
JEL-codes: C23 D22 D25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7370
Access Statistics for this paper
More papers in CESifo Working Paper Series from CESifo Group Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().