Norway's Statoil ASA unveiled investment plans for its Arctic Johan Castberg oil discovery, which is expected to begin production in 2022 with CapEx of 49 billion Norwegian kroner.
The project was expected to cost more than 100 billion kroner initially, making it unfeasible with an $80-per-barrel break-even cost. However, Statoil worked with suppliers to lower costs and the field is now expected to be profitable with oil at less than $35 per barrel, the company said.
The field has an estimated 450 million barrels to 650 million barrels of oil equivalent recoverable resources, making it the largest offshore oil and gas development to receive a go-ahead in 2017, Statoil said.
The company also said it is signing a contract with Aker Solutions AS for subsea system and engineering procurement management valued at about 4 billion kroner.
Statoil has a 50% holding in the development and will be the operator while Eni holds 30% and Petoro has a 20% stake.
As of Dec. 4, US$1 was equivalent to 8.33 Norwegian kroner.