French oil major Total has cast doubt on plans to develop the Norvarg gas field in the Arctic after revealing the project was not commercially viable.
The company said that gas flow rates from the field were not enough to sustain development, with estimates of the amount of gas contained on the field having been halved.
The decision casts more doubt on the viability of exploration in the Arctic region of the Barents Sea, following Statoil’s suspension of the Johan Castberg field earlier this year.
Originally up to 50 billion cubic metres of gas had been expected in the field, but that number is 50% lower following further studies by Total in July. The flow rate from the field, the company said, was around 200,000 cubic metres a day.
“The problem we have on Norvarg is productivity,” Total Norway’s Martin Tiffen told Reuters.
“It is very hard to see how we can have a commercial development with that kind of flow rate.
“That is our challenge today. With flow rates like that, it does not matter how much gas you have in place.”
In August Statoil said it was looking to find a simpler solution for the £10billion Johan Castberg project, after tax increases by Norway’s government made the cost of developing the Barents Sea find more marginal.
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