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The Role of Oil Prices in Norwegian Petroleum Investments. An Empirical Study

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Abstract

This paper provides evidence that oil price fluctuations have been an important driver of petroleum investment in Norway. To show this, I utilize a Bayesian vector autoregressive (BVAR) model combined with local projections, using various investment data from national accounts and firms’ survey data. I find that a 10 percent increase in real oil prices typically results in about a 4 percent rise in petroleum investment, primarily boosting activities in exploration and existing fields, while field development investments show minimal response. These results contribute to a broader understanding of the role of oil prices in shaping Norwegian business cycles.

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  • Julia Skretting, 2024. "The Role of Oil Prices in Norwegian Petroleum Investments. An Empirical Study," Discussion Papers 1016, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:1016
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    More about this item

    Keywords

    Oil Prices; VAR model; Investment Dynamics; Macroeconomic Shocks; Bayesian Analysis; Energy Economic;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels

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