OSLO (Reuters) - Norway’s Statoil (STL.OL) plans to build a new platform at its Snorre field in the North Sea to extract another 300 million barrels of oil and extend the project’s lifetime to 2040, it said on Monday.
The 40 billion crown ($6.79 billion) project has been in doubt since the government decided in May to increase taxes but Statoil has managed to increase recoverable reserves and its chief partner in the project, state holding firm Petoro, has also lobbied hard for the new platform.
“The change in the petroleum tax rules that was adopted in May ... undermines the financial conditions of Snorre 2040, which means that we have to spend more time on maturing the project,” Oeystein Michelsen, Statoil’s development chief for Norway said in a statement.
Rising costs across the oil industry have also hampered the project, forcing Statoil to hold back on the plan until it had more resources, it said.
The third platform at Snorre will increase the recovery rate
to 55 percent, well above the 25 percent targeted when the original development was proposed in 1989 and also above the industry’s typical recovery rate of 30 to 35 percent.
Statoil will take a final development concept decision in the first quarter of 2015 and the platform is scheduled to start production in the fourth quarter of 2021.
Statoil holds 33.3 percent of the license while other shareholders include Petoro (30.0 percent), ExxonMobil (XOM.N) (17.4 percent), Idemitsu Petroleum (5019.T) (9.6 percent), RWE (RWEG.DE)(8.6 percent) and Core Energy (1.1 percent). ($1 = 5.8922 Norwegian krones)
Reporting by Balazs Koranyi; Editing by David Cowell