Representatives of the Norwegian company Statoil, which can rightfully be considered an energy giant, announced that they are postponing the development of the Johan Castberg and Snorre 2040 projects off the coast of Norway, as low oil prices force them to make more and more cost cuts.
Statoil delayed the choice of development concepts for the Johan Castberg project by more than a year (until the second half of 2016). And a similar decision was made to freeze work on the Snorre 2040 project.
Final investment decisions on the projects are scheduled for the fourth quarter of 2017, and production is scheduled to start in the fourth quarter of 2022.
Statoil Senior Vice President said the company has made significant progress in cutting costs on the Johan Castberg project. However, the current oil price issues require management to pay more attention to project cost-benefit analysis. Statoil hopes to find the most profitable economic solutions for the implementation of existing projects in the current market economy.
The company adds that Johan Castberg and Snorre 2040 are still considered the largest and most important projects in Statoil’s portfolio, but in the current environment, more time has to be spent on developing reliable solutions for their development.