Norway is the largest oil and gas producer in western Europe. Credit: Cavan Images – Lukasz Z/Shutterstock.

Oil and gas companies operating in Norway are projected to invest a record Nkr275bn ($24.68bn) in 2025, reported Reuters, citing the Offshore Norge industry association. This marks an increase from Nkr263.7bn this year and exceeds earlier expectations, the association said.

A year ago, the industry group had forecasted oil and gas investments for 2024 and 2025 to total Nkr240bn and Nkr225.9bn, respectively.

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The increase in investment is attributed to a combination of cost inflation, accelerated development, expanded project scopes at various fields and additional drilling at existing oil and gas sites, according to Offshore Norge.

Companies intend to begin drilling 45 exploration wells in Norwegian waters next year, an increase from 41 in 2024 and the highest number since 2019, the group reported.

Norway, the largest oil and gas producer in western Europe, currently produces just over four million barrels of oil equivalent per day (boepd) and is focused on extending its production for decades to come.

The outlook was derived from responses provided by 14 companies including Equinor, Aker BP, Vår Energi, ConocoPhillips and Shell, which together account for nearly 100% of the country’s output.

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Offshore Norge’s survey forecasted that after 2025, oil investments will gradually decrease, dropping to Nkr251bn in 2026 and Nkr203bn by 2029, as current development projects are completed.

Equinor’s Arctic Johan Castberg and Vår Energi’s Balder X oilfields are expected to start production in the first and second quarters of 2025, respectively, while Aker BP’s Yggdrasil field is set to come online in 2027.

Investment estimates for 2029 could still rise, however, as oil companies introduce new projects, despite being constrained by a lack of significant new discoveries.