I have written four articles in the “Focus Norway Edition” and all the articles have discussed the Norwegian oil & gas exploration industry and the impact of lower energy prices on the Norwegian economy. This article will focus on the petroleum supply and services industry (catering to the upstream oil & gas industry), presenting some key facts about this important industry in the Norwegian economy.
Before presenting some key facts that provide insights on the impact of the industry for the Norwegian economy, the illustration below from the Ministry of Petroleum and Energy shows the diversity of the Norwegian services and supply industry.
Key Facts On The Norwegian Petroleum Services Industry (Source: Ministry of Petroleum and Energy and the Norwegian Petroleum Directorate)
- The service and supply industry is Norway’s second-largest industry measured in terms of turnover, after the oil and gas industry.
- For 2014, the services and supply industry in Norway recorded turnover of $527 billion with 37% of the total turnover coming from international markets.
- The five most important markets for the petroleum supply industry in 2014 were South Korea, The United Kingdom, Brazil, The United States of America and Australia.
- The development in subsea technology is making it possible to extract oil and gas at increasing depths and Norwegian companies are technology leaders in this sub-segment.
Why Discuss These Facts?
The reason for touching on this industry is the point that there are several attractive investment options in the petroleum services industry in Norway. International investors, as a part of their portfolio diversification, can consider exposure to one or more of the services companies listed in the Norwegian stock exchange.
Aker Solutions – The Company is a global provider of products, systems and services to the oil and gas industry. Aker Solutions provides subsea production equipment and offshore field design, ranging from concept studies and front-end engineering to subsea production systems. The company also carries out maintenance and modifications work and provide services during operations as well as deliver solutions to extend the lifetime of oil and gas fields.
Aker Solutions is listed in the Oslo Bors with ticker “AKSO” and the company currently has an order backlog of NOK40 billion that provides robust revenue visibility. While detailed discussion on the stock requires another article, I just wanted to mention this stock as an attractive investment option for long-term value investors.
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