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 metres of water in production licence 532 about 240 kilometres north-west of the Melkoya LNG plant in Hammerfest and 100 kilometres north of Snohvit field, the Norwegian Petroleum Directorate said.
The plan includes a production vessel and subsea development with a total of 30 wells, ten subsea templates, and two 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
Initially non-commercially viable “due to high capital expenditures of more than 100 billion kroner and a break-even oil price of more than US$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 US$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 organisation in Harstad. The costs of operating the field are estimated at 1.15 billion kroner/year.
Together with other operators of oil discoveries in the Barents Sea, Statoil is investigating the possibility of finding a profitable oil terminal solution at Veidnes in Finnmark county.
With the PDO submission, Statoil has let contracts. For the Johan Castberg subsea system, as well as engineering and procurement management, contracts were let to Aker Solutions AS with a total value of four billion kroner.
On behalf of the partners in the Snorre licence, Statoil is signing a letter of intent with FMC Kongsberg Subsea AS for the subsea system for Snorre Expansion Project (SEP). The LOI, worth slightly less than two billion kroner, includes six subsea templates and subsea production equipment for a total of 24 wells.
All contracts are subject to government approval of the PDO.
Operator Statoil has 50%, Eni 30%, and Petoro 20%.