The Johan Castberg partnership, consisting of Equinor, Vår Energi and Petoro, is today updating the project cost estimate. The investment estimate has increased by almost NOK 13 billion since last year.
Our plan for production start in the fourth quarter of 2024 remains unchanged.
“Costs are increasing due to a larger than expected scope of work and cost increases in the industry, we take this seriously. However, Johan Castberg is still a good project with a solid economy. With a breakeven of around USD 35 per barrel, Johan Castberg will provide substantial revenue and ripple effects to the community from the Barents Sea for 30 years,”
says Geir Tungesvik, Equinor’s executive vice president for Projects, Drilling & Procurement.
In 2022, the Johan Castberg hull, including living quarters, was transported from Singapore to Stord for installation and commissioning. The main reason for the rise in the investment estimate from last year is that the workload transferred to Stord has been more comprehensive and complex than estimated. In addition, the project has not progressed as planned. Due to the market cost development the marine operations, drilling and completion costs have also increased.
Proven volumes in Johan Castberg are estimated at between 450 and 650 million barrels of oil.
The vessel is designed for a daily production of close to 190 000 barrels.
Cover Image Courtesy of Equinor
Johan Castberg quayside at Aker Solutions, Stord
(Photo: Øyvind Gravås/Equinor)
