Equinor has taken a £225million impairment charge on the value of its Mariner asset, a year after achieving first oil.
In newly-published accounts for its UK subsidiary, the Norwegian energy firm revealed the write-down was taken in the first quarter of this year, largely due to the collapse in oil prices brought on by Covid.
The impairment was also due to adjustments to Mariner’s reserves and production estimates, the company said.
An Equinor spokesperson said: “In the course of 2020 the Mariner asset was impaired due to reduced future oil price assumptions as well as adjustments to the production profile and reserves estimate, reflecting a greater understanding of the reservoir following the first year of production.”
At the time of start-up last year, Equinor said 300million barrels were recoverable from the Mariner field.
Oil firms globally have taken major impairments on their assets as a result of Covid – ExxonMobil being a prominent example, taking the largest writedown in modern history of up to $20billion (£15bn).
Closer to home, Taqa has taken a £339m hit on its UK North Sea assets, also triggered by the Covid-19 pandemic impacting the oil price.
Mariner was started up in September 2019, after a £6.4billion investment from the energy firm, one of the largest in the UK sector for a decade.
The field, 95miles east of Shetland, is expected to continue producing through to 2050.
Equinor said safe operations have continued throughout 2020.
In the accounts, the firm said: “Mariner asset was subject to an impairment charge of £226m during the first quarter of 2020.
“This was due to significant rephrasing of production volumes from near term to longer term in addition to lower short term prices.”
Equinor is the operator of Mariner with a 65.11% stake. The partners are JX Nippon (20%), Siccar Point (8.89%) and ONE-Dyas (6%).
The heavy oilfield was first discovered in 1981 but it took decades for the industry to work out how to make it viable, with Equinor submitting a field development plan in 2012.
Construction started in 2013 with the 22,000 tonne platform jacket being installed two years later.
Last year Equinor estimated up to three billion barrels were in place at the oilfield, its first operated asset in UK waters.
The firm’s next target is the Rosebank project, west of Shetland, although an investment decision has been postponed until 2022.
Earlier this year, Equinor sold part of its stake in another project, Bressay, to EnQuest who have become operator.
Lying just 30miles north-east of Mariner, Bressay is thought to be even more complicated and has remained shelved since 2007.
EnQuest is considering developing the field via its Kraken FPSO, another heavy oil field, with produced gas to be used as fuel for the vessel, lowering emissions.
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