The Johan Castberg oil project in Norway’s Arctic Barents Sea, delayed by Statoil ASA (STL) because of cost overruns, tax changes and uncertain reserve estimates, will be developed, the country’s new energy minister said.
“The parties will find good solutions to this,” petroleum and energy minister Tord Lien said in an interview today. “If we see that this type of process isn’t coming on track, we’ll of course look at how to handle it.”
Statoil, the country’s biggest oil and gas producer, said in June it is delaying plans to develop Castberg, which consists of the twin Skrugard and Havis finds holding as much as 600 million barrels of crude in total. The company, 67-percent owned by the state, cited a May tax increase, cost overruns and smaller reserves than anticipated for reviewing plans to build a pipeline and an oil terminal.
Although the new Conservative-led government that took power last week won’t reverse the tax increase, it has said it will consider changes to taxation to stimulate increased recovery from producing and marginal fields. Such changes would be the initiative of the finance ministry, Lien said.
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