Statoil to delay development of Johan Castberg, Snorre 2040 projects

Statoil ASA and its respective partners have reported the postponement of the development of both the Johan Castberg and Snorre 2040 field projects to cut costs.

“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 utilization of the resources in the Snorre and Johan Castberg fields,” said Ivar Aasheim, Statoil’s senior vice-president for field development on the Norwegian continental shelf. “The recent decline in oil prices emphasizes this.”

The Johan Castberg partnership has decided to postpone the decision to continue until second-half 2016, “with expectations for an investment decision in 2017,” Statoil said.

The Statoil-operated discoveries Skrugard from 2011, Havis in 2012, and Drivis from 2014 comprise what is now the Johan Castberg project. Proved volumes in Johan Castberg are estimated at 400-650 million bbl of oil. Licensees in the Johan Castberg licence are Statoil, Petoro, and Eni.

Statoil said that “studies are continuing on the alternatives for an oil infrastructure in the Barents Sea by a group of operators in the area including Statoil, Lundin Norway, Eni, and OMV.”

The company said the aim is to “assess the foundation for an onshore terminal that could support multiple fields in the Barents Sea.”

The Snorre 2040 partnership, meanwhile, has decided to extend the progress plan. The new schedule for the preliminary decision to implement is fourth-quarter 2016.

Snorre is one of the fields with the largest remaining oil resources on the NCS. The subsurface is complex, and major investments will be required to produce the resources, Statoil said.

“The selected concept to construct a new platform, Snorre C, forms the basis for the work leading up to a new time for the decision point, which is fourth-quarter 2016. A final investment decision is scheduled for fourth-quarter 2017, with production start in fourth-quarter 2022,” Statoil said.

Snorre field reserves are currently estimated at 1.63 billion bbl of oil. The original estimate, when the plan for development and operation was submitted in 1989, was 760 million bbl of oil.

The licensees in the Snorre license are Statoil, Petoro, ExxonMobil, Idemitsu, RWE Dea, and Core Energy.