Statoil blames both “Uncertainties related to the resource estimate” and the Norwegian government’s recently “proposed reduced uplift in the petroleum tax system” when the company explains its decision to delay the investment decision for the Johan Castberg field (formerly named Skrugard and Havis) in the western part of the Norwegian sector of the Barents Sea.
“In addition, the Norwegian government has recently proposed reduced uplift in the petroleum tax system, which reduces the attractiveness of future projects, particularly marginal fields and fields which require new infrastructure. This has made it necessary to review the Johan Castberg project,” says Øystein Michelsen, Statoil’s executive vice president for development and production in Norway.
Last year, Statoil announced estimates that the field contains 400 to 600 million barrels of oil.
Located more than 200 kilometers north-west of North Cape, the oil-discovery is the largest so far north in any offshore areas of the Arctic.
“The updated project estimates and the new uncertainty in the tax framework has made it necessary to consider what consequences this may have for the development concept,” says Michelsen.
Statoil is now drilling four exploration wells in the area around Johan Castberg. The objective is to prove additional resources to add further robustness to a potential development. This is part of a wider campaign which also includes additional exploration wells in other areas of the Barents Sea.