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Norwegian Parliament approves Equinor's $6B plan for Barents Sea field

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Norwegian Parliament approves Equinor's $6B plan for Barents Sea field

Norway's Parliament approved June 11 Equinor ASA's plan to develop and operate the Johan Castberg field in the Barents Sea.

The field is expected to begin operation in 2022, with recoverable resources totaling anywhere from 400 million barrels of oil equivalent to 650 MMboe.

Development of Johan Castberg will consist of a production vessel and a subsea system, including a total of 30 wells distributed on 10 templates and two satellite structures, and is expected to cost 49 billion Norwegian kroner.

Equinor's partners in the Johan Castberg field are Eni SpA and Petoro AS.

The original cost of developing Johan Castberg was pegged at more than 100 billion Norwegian kroner, with a break-even crude oil price above US$80/bbl. However, in an effort to trim total project costs, Equinor changed the original design concept for the field and is exploring ideas for constructing an oil export terminal, making it profitable at an oil price below US$35/bbl, the company said.

The plan for Johan Castberg will now be submitted to the Norway Ministry of Petroleum and Energy for formal approval.

Formerly known as Statoil ASA, the company changed its name to Equinor in mid-May amid its transition into a broader-based energy firm.

As of June 11, US$1 was equivalent to 8.02 Norwegian kroner.