OSLO, Norway, Sept. 25 (UPI) — A partner in giant Johan Svedrup oil field off the coast of Norway said the initial estimate of expense for the first phase of operations was cut by $1 billion.
An initial development plan submitted in February to the Norwegian government called for first-phase capital expenditures of $14.7 billion. Det Norske, a project partner, said lead developer Statoil lowered the estimate by about $1 billion.
“The updated estimate is showing reduced capital expenditures as a result of positive market response in contracts and purchase orders,” the company said in a statement.
The Norwegian government signed off on Statoil’s initial development plans for the giant Johan Sverdrup oil field in August.
First oil is expected late 2019. The first phase of operations should yield as much as 380,000 barrels of oil per day, roughly half of the expected peak production rate.
Once in full swing, the field, the fifth largest ever discovered off the Norwegian coast, should account for up to 25 percent of all Norwegian petroleum production.
The reduced spending forecast comes as the Norwegian government anticipates slow economic growth for the medium term because of the low price of crude oil.
Norge Bank, the country’s central bank, said a weakened value of its currency, the krone, could make exports more attractive, though the overall economy is expected to falter and unemployment is projected to rise.
Preliminary production figures from the Norwegian Petroleum Directorate, the nation’s energy regulator, show an average daily production of around 1.9 million barrels of oil, natural gas liquids and condensate. That’s about 2 percent less than July.
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