Norway expects its oil and gas investments, a cornerstone of its economy, to drop by nearly 21 percent by 2017 from a record high last year, the government said in its 2016 budget on Oct. 7.

Oil companies have slashed investments over the past year in response to a halving of crude oil prices since mid-2014 and soaring development costs.

The Norwegian government now sees investment in the sector, excluding exploration, falling to 135 billion crowns (US $16.3 billion) in 2017 from 170 billion crowns in 2014. Including exploration, investment is expected to fall to 167 billion crowns next year from 184 billion crowns this year.

The government said it would continue to survey its offshore Arctic area bordering Russia to map out oil and gas deposits, proposing to spend 173 million crowns from its budget on mapping.

Mapping out the area was important "to mark (our) presence in the North and to safeguard national interests," Norwegian oil and energy minister, Tord Lien, said in a statement.

In its budget the government announced tax cuts to boost the economy which has been hit by the weak oil sector.

The budget also projected that the cost of developing Total's Martin Linge oilfield would now be 14 percent higher than last year's estimate and 26 percent higher than initial projections given in 2012.

The field would also start production a year later than planned, in January 2018. Total's partners include Statoil and Norway's state-owned Petoro.

Similarly production from the Statoil-operated Aasta Hansteen gas field off Norway could be delayed into 2018, from an expected start-up in the final quarter 2017, due to a delay in the building of a platform.

Offshore