Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/191395
Authors: 
Parmer, Pernille
Strøm, Steinar
Thorsen, Helge Sandvig
Ubbe, Inger
Kvinge, Bjørnar Andreas
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 7370
Abstract: 
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.
Subjects: 
oil and gas investments
prices of oil
panel-data
JEL: 
C23
D22
D25
Document Type: 
Working Paper

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