Norway's Statoil plans to invest the equivalent of $2.34 billion on extending the lifetime of a field in the Norwegian Sea and starting production in a new field nearby, the Norwegian oil major said on Monday.
Statoil submitted with authorities today plans to invest $2.34 billion (19.8 billion Norwegian kroner) to keep the Njord field - whose production began in 1997 and was halted in 2016 -- in operation by 2040 through upgrading the existing platform, and in the new Bauge field. Statoil is committing $1.857 billion (15.7 billion Norwegian kroner) to the Njord field, and another $485 million (4.1 billion Norwegian kroner) to the Bauge field.
"When we submitted the plan for development and operation for the Njord development 20 years ago we assumed that the field would be shut down in 2013. With new technology, project improvements and close cooperation with the partners and supply industry, we now see opportunities to create considerable value for another 20 years at Njord", Margareth Øvrum, Statoil's executive vice president for Technology, Projects and Drilling, said in the company statement.
Statoil expects both projects to come on stream at the end of 2020, and has estimated the remaining resources on the Njord field at 175 million barrels of oil equivalent, and those at Bauge at 73 million barrels of oil equivalent.
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The Norwegian Petroleum Directorate acknowledged the receipt of the plans for development and operation, and its assistant director for Development and operation, Kalmar Ildstad, said:
"We are interested in ensuring investments to extend field lifetimes. This will allow both recovery and value creation to increase, while also opening up opportunities for developing other discoveries in the area."
Last month, Statoil said that due to strict capital discipline, its organic capital expenditure was reduced to $10.1 billion last year, but organic investment was expected higher this year, at around $11 billion.
By Tsvetana Paraskova for Oilprice.com
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