Statoil revives plans for offshore field

Article by Staff Writer

NORWEGIAN oil giant Statoil has revived plans for developing the Johan Castberg field, off the coast of Northern Norway.

The company said explorations revealed there is between 450m–650m bbl of oil in the field, and it is prepared to invest up to US$7.2bn in the project’s development. This is the largest oil field yet to be developed on the Norwegian continental shelf (NCS).

Statoil stated that “the project will be important to Norwegian industry and have strong ripple effects”. However, with a five-year investment phase scheduled for 2018–2022, a continued low oil price may affect the plans.

Margareth Øvrum, executive vice president for technology, projects and drilling at Statoil, said: “We have created new opportunities for the…field in the far north. We have changed the concept and found new solutions that allow us to realise the project. But we are still vulnerable to increasing costs and a continued low oil price.”

The project also faces the challenge to power the proposed infrastructure which could affect the timeline and feasibility of the project. Total investment costs for partial/full electrification for the project are estimated to be US$485m–1.46bn. Øvrum said that the new solutions will help with power generation.

“We have developed a highly energy-efficient solution involving use of gas turbines for power generation. By use of heat recovery we achieve a turbine power efficiency of 64%, which is an outstanding result for use of gas turbines on offshore platforms,” she added.

Statoil says CO2 Emissions from the gas turbines will be 270,000 t/y, or 2% of current annual emissions from the NCS.

The plans are now open for consultation and a final development plan for the project is due in 2017. Statoil says the plan will present relevant development solutions and expected impacts on other businesses and communities. A spin-off report said the project has the potential to create value of around US$3.5bn for Norwegian goods and services suppliers in Northern Norway.

“The field will be producing for more than 30 years, and the project spin-offs will be created in the production phase,” said Arne Sigve Nylund, executive vice president for development and production Norway. “Castberg will trigger much activity for suppliers in North Norway and have ripple effects throughout Norway, both in the development phase and the operating phase.”

The proposed plans only cover the offshore field development and not a possible terminal at Veidnes, which Statoil says is a separate project with a separate timeline.

Article by Staff Writer

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