Norwegian oil giant Statoil has warned it may delay investment plans on a major North Sea increased recovery project after a hike in taxes.
The company had been looking to build a new drilling and processing platform on the Snorre field in a bid to extract more than 300million extra barrels of oil from the veteran field.
A final decision had been expected next year on going ahead with the project, around 200km west of Floro on the Norwegian Continental Shelf, but now it could be delayed in search of cheaper alternatives.
“We have to revisit the project, to look at concepts and make a new evaluation,” chief financial officer Torgrim Reitan said today, adding it was too early to say in a decision would be made next year.
The warning comes just days after the chief executive of state oil group Petoro warned that changes to Norwegian oil taxes would have a amjor impact on increased-recovery projects such as the Snorre 2040 scheme.
The original £4billion plan to extend the lifespan of the Snorre field was announced last October, and would see Statoil, along with partners Petoro, ExxonMobil, Idemitsu, Core and RWE Dea, adding a third platform on the 22-year-old field.
It was backed by the Norwegian Petroleum Directorate over an alternative, which would have seen a new subsea development being created to utilise the existing two rigs on the site. The facilities would have been tied back to the Gullfaks or Visund pipelines.
The oil giant postponed its Johan Castberg oil project in the Barents Sea last year over tax issues, saying the changes made by the country’s previous government limited the margins on the fields. The company said earlier this year it was planning to cut spending by up to eight per cent for the next three years.
But Norway’s government has warned Statoil it cannot pick and choose projects based on profit alone.
“Cost reductions implying that companies leave profitable resources in the ground, are not OK,” said energy minister Tord Lien in a speech to the Norwegian Oil and Gas Association in Oslo today.
“To extract only the most profitable oil or gas from a reservoir is not compatible with licensees’ obligations.”
A spokesman for the Norwegian Petroleum Directorate said the oil company was free to review the Snorre project, but warned it still expected Statoil to do as previously said.
Meanwhile Aberdeen firm Pipelines 2 Data has agreed a framework agreement with Statoil to clean and survey their pipe network.
“This is the first time that Statoil have issued a separate agreement to a cleaning vendor,” said managing director Steve Mayo.
“To be recognised by Statoil is a tremendous achievement for us as we build on our UK North Sea success into Norwegian markets and beyond.”
Recommended for you
