The price of building a field on the Norwegian Continental Shelf (NCS) has fallen by an average 40% since the Autumn of 2014, according to new data.
The findings have been revealed by the Norwegian Petroleum Directorate (NPD) who said the decrease is due to a combination of easier development solutions and more efficient drilling.
Lower prices of both labour and equipment have also contributed.
The NPD said investment estimates for for projects including Utgard, Oda, Zidane Trestakk, Slughorn, Johan Castberg, Snorre Expansion Project and Johan Sverdrup Phase 2 has fallen from about NOK270billion to NOK150 billion, according to the operators’ own calculations.
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The NPD’s director of development and operation, Ingrid Sølvberg said: “This is a significant and very pleasing reduction.The oil companies and the supplier industry has made a remarkable effort in streamlining the business, and now we see that the measures are working.”
The biggest savings on the eight projects have been due to altered development solutions.
The second largest reduction has been in drilling and wells which on average accounts for about 30% of the total costs of a field development.
The NPD said this is due to a decline in rental rates for rigs.
In addition, actual drilling operations are more efficient.
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