Statoil Keeps Cutting Costs, Reduces Spending on Johan Castberg

Norway’s Statoil reportedly said it has already cut costs for the Johan Castberg project by an estimated 30%, explaining that the 50% decrease in oil prices forced the company to reduce spending.

“I've been in business for over 30 years and all projects meet a crisis…We are still optimistic, objective concept for the next year and investment decision in 2017,” Tellefsen said, as reported by Petro.no.

Statoil’s vice president for field development Erik Strand Tellefsen also said that the company aims at taking a concept decision in 2016, and an investment decision the year after, according to Offshore.no.

Three oil discoveries Skrugard, Havis and Drivis located in PL 532 form the resource base for the Johan Castberg field development project. 

In September, partner Det norske said that Statoil has cut its estimate for the first phase of the development to 114 billion crowns ($13.42 billion) from 123 billion in nominal terms. 

This news shows how companies could continue slashing costs over the next months to adjust to the current market conditions. Additionally, it suggests that real cost cuts might be higher than preliminary figures. 

Other partners in the field include state-owned Petoro, Sweden's Lundin Petroleum and Denmark's Maersk Oil.

Last week, Norway told the European Union it lacked a clear strategy on gas, and was therefore impacting on Oslo's willingness to invest in new fields and pipelines.