Statoil Delays Castberg Project

Johan Castberg license partners, comprised of Statoil (STO), Eni and Petoro, are dedicating more time in making the final concept selection for the Johan Castberg project.

“The companies will continue efforts to mature the technical development solution, updating the resource basis and reducing cost leading up to the summer of 2015. The partners will also further assess the financial basis for an oil terminal at Veidnes,” said Arne Sigve Nylund, Statoil executive vice president for Development and Production Norway.

The Johan Castberg project involves Statoil discoveries Skrugard (2011) and Havis (2012). The findings served as a major advancement for the Barents Sea as a new oil province. The volumes in Johan Castberg are proven to be about 400-600 million oil barrels.

As the Johan Castberg licence operator, Statoil has executed an exploration campaign to reveal additional resources that can make Johan Castberg viable for an expanded infrastructure in the region. The exploration campaign has lasted in excess of 12 months, and comprised a total of five wells at multiple reservoir depths.

“Unfortunately, the exploration campaign has proven less new oil resources in the Castberg area than expected. In total, we have not proven enough resources in Castberg to make the field viable for supporting infrastructure, including a pipeline to shore and an onshore terminal on its own,” Nylund says.

The Johan Castberg partners have decided to spend the time leading up to the summer of 2015 to make the final concept selection for the Johan Castberg project. The three main areas of focus will be: technical development solution, an economic evaluation of an oil terminal at Veidnes, and a resource update along with cutting project costs.