Statoil submits development plan for Johan Castberg project

Statoil ASA has submitted a plan for the development and operation (PDO) of its Johan Castberg project offshore Norway to Norwegian authorities, and said recoverable resources are estimated at 450-650 MMboe.

Johan Castberg lies in 400 m of water in production license 532 about 240 km northwest of the Melkoya LNG plant in Hammerfest and 100 km north of Snohvit field, the Norwegian Petroleum Directorate said.

The plan includes a production vessel and subsea development with a total of 30 wells, 10 subsea templates, and 2 satellite structures.

Previous Statoil-operated oil discoveries—Skrugard, Havis, and Drivis—serve as the basis for the development. In 2015, as oil prices fell, the partnership postponed a decision on Johan Castberg (OGJ Online, Mar 6, 2015).

Initially noncommercially viable “due to high capital expenditures of more than 100 billion kroner and a break-even oil price of more than $80/bbl,” said Margareth Ovrum, Statoil’s executive vice-president for technology, projects, and drilling, capital expenditures are now estimated at 49 billion kroner, with profitability expected at oil prices less than $35/bbl.

According to NPD, start of oil production is expected in fourth-quarter 2022, 11 years after discovery well 7220/8-1 was drilled, with an expected lifetime production of 30 years.

The project—the biggest offshore oil and gas development to be given the go-ahead this year and the northernmost development on the Norwegian continental shelf, according to NPD—will be the sixth to come on stream in northern Norway, Statoil said, and infrastructure is expected to be built in a new area on the NCS.

The field will have a supply and helicopter base in Hammerfest and an operations organization in Harstad. The costs of operating the field are estimated at 1.15 billion kroner/year.