Statoil Delays Two Major Projects on Norwegian Continental Shelf

Statoil says it’s delaying two main tasks on the Norwegian continental shelf amid low oil costs and the necessity for extra sturdy planning as a way to reduce prices.

Decisions on future developments of the 2 tasks, Johan Castberg and Snorre 2040, will not be anticipated now till the second half of 2016 for Castberg and fourth quarter of 2016 for the Snorre 2040 challenge.

“Castberg and Snorre 2040 are two major and important projects in our portfolio, and it is important that we find sound and robust development solutions for them,” says Ivar Aasheim, Statoil’s senior vp for subject improvement on the NCS.

Regarding the Johan Castberg challenge, Statoil says the partnership has determined to postpone the idea determination, the so-called DG2, till the second half of 2016, with expectations for an funding determination in 2017. Statoil notes that though the challenge has achieved important value reductions in recent times, the partnership corporations, licensees Statoil, Petoro, and Eni, see additional potential. The confirmed volumes in Johan Castberg subject, located roughly 100 kilometers north of the Snøhvit-field within the Barents Sea, are estimated at between 400 and 650 million barrels of oil.

The idea determination for Johan Castberg was beforehand scheduled for summer time 2015.

“We have made significant progress in reducing costs for Johan Castberg. However, current challenges in relation to costs and oil prices require us to spend more time to ensure that we extract the full benefit of the implemented measures,” Aasheim says.

The Snorre partnership, made up of licensees Statoil, Petoro, ExxonMobil, Idemitsu, RWE Dea, and Core Energy, has been face with related points.

The preliminary determination to increase the progress plan for Snorre 40 is now anticipated within the fourth quarter of 2016. The determination consists of whether or not or to not lengthen the lifetime of the prevailing platforms Snorre A and Snorre B till 2040 so as enhance restoration from the Snorre subject. The chosen idea is to assemble a brand new platform, Snorre C, which might enhance the restoration fee on the subject to 54%. A ultimate funding determination is now scheduled for 4Q 2017, with manufacturing begin in 4Q 2022.

The earlier ultimate funding determination and manufacturing start-up for the Snorre 2040 idea have been deliberate for This autumn 2016 and This autumn 2021, respectively.

With an estimated reserve of 1.63 billion barrels of oil, Snorre is without doubt one of the fields with the most important remaining oil assets on the Norwegian continental shelf, however would require excessive investments as a way to produce the assets, making profitability a problem. Currently 35% of the oil is produced and the estimated restoration fee from present infrastructure is 47% by 2040. Located on the Norwegian North Sea, this Snorre subject has been producing oil and fuel since August 1992.

“We see that our efforts have yielded results, and we are focused on reaping the full benefits of this in a way that ensures a sustainable and profitable utilisation of the resources in the Snorre and Johan Castberg fields. The recent decline in oil prices emphasises this,” Aasheim says.