Statoil: Johan Castberg, Snorre 2040 Timelines Changed

The licensees in the Johan Castberg and Snorre 2040 licences have decided to spend more time on the projects.

“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 (STO)’s senior vice president for field development on the NCS.

Statoil and its partners have put in an extensive effort to develop cost-effective solutions for the projects.  

“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.

Further improvements needed on the Johan Castberg field

The Johan Castberg partnership has decided to postpone the decision to continue, the so-called DG2, until the second half of 2016, with expectations for an investment decision in 2017.

The Johan Castberg licence has achieved significant cost reductions in recent years, but the companies see further potential.

“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.

At the same time, 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 aim is to assess the foundation for an onshore terminal that could support multiple fields in the Barents Sea

Major investments in Snorre 2040

The Snorre partnership has decided to extend the progress plan for Snorre 2040. The new schedule for the preliminary decision to implement (DG2) is the fourth quarter of 2016.

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

High investments in combination with challenging profitability characterise the Snorre field’s further development leading up to 2040.

Systematic work has taken place over several years to find the right solution for this project. The conclusion is that more time is needed for the owners to reduce investment costs and improve the understanding of the reservoir.

The licensees have an ambition to increase the recovery rate on the Snorre field. The existing infrastructure has a given technical lifespan, and this will be decisive in the planning of Increased Oil Recovery (IOR) measures.

The Snorre 2040 project works systematically to extend the lifespan for existing facilities, and to limit any loss of production due to the revised progress plan.

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 4Q 2016. A final investment decision is scheduled for 4Q 2017, with production start in 4Q 2022.

Reserves in the Snorre field are currently estimated at 1.63 billion barrels of oil. The original estimate, when the plan for development and operation (PDO) was submitted in 1989, was around 760 million barrels of oil.

By means of a number of IOR measures and use of new technology, the recoverable reserves have more than doubled.

When the PDO was submitted, the estimated recovery rate was 25%. Today the expected recovery rate is 47%, but through the Snorre 2040 project, the owners have an ambition to increase this even more.