Photo: Jpt.spe.org

Equinor energy company is commencing oil production at the largest field in the Norwegian sector of the Barents Sea in the fourth quarter of 2024

Later this year, a Norwegian state-owned multinational energy company Equinor, will start production of a major oil and gas field named after Johan Castberg, the first Norwegian Minister of Social Affairs, about 150 miles off Norway's northern coast. The delay in field commissioning and the estimated recoverable reserves of 450-650 million barrels of oil equivalent are indicative of the complex challenges the energy sector faces. Uncertainties in the resource base significantly impacted project viability, while global events like the Covid pandemic as well as the high costs associated with production equipment complicated financial planning and investment decisions.

The creation of a Floating Production, Storage and Offloading unit (FPSO) has halved the estimated cost of the project. As a result, the original minimum margins have been reduced from $70 to Equinor's current estimate of $30 per barrel. FPSO Johan Castberg is currently in a shipyard in mainland Norway where Aker Solutions is installing the latest production systems. FPSO is designed to produce up to 190,000 barrels from 18 production wells, to be supported by 12 injection wells. Oil and gas production will take at least 30 years as Equinor expects. So far, some other fairly large oil and gas fields have been geologically explored in the vicinity of Johan Castberg.

Many Norwegian politicians are strongly in favour of the green agenda and the reduction of fossil fuels. Lars Haltbrekken, a Member of Norwegian Parliament, SLP MP, has criticised Trygve Slagsvold Vedum, Minister of Finance, saying that he misleads the society and exaggerates the revenues from the Castberg field by a factor of three. It was revealed that the promised total revenue of NOK 1,500 billion over 30 years has been reduced to about a third, namely, to NOK 414-598 billion.

The exaggeration of revenues from fossil fuel extraction increases the risk that new large, polluting oil and gas developments are likely to start, the SLP MP said.

Based on Jpt.spe.org, Nrk.no

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