Equinor, partners delay development of northernmost Arctic oilfield

Equinor, partners delay development of northernmost Arctic oilfield

Anders Opedal, chief executive of Norwegian oil firm Equinor, speaks at a news conference in Fornebu, Baerum, Greater Oslo Region, Norway August 10, 2020. — NTB Scanpix/Hakon Mosvold Larsen pic via Reuters

Thursday, 10 Nov 2022 5:38 PM MYT

OSLO, Nov 10 — Norway’s Equinor and partners are delaying the development of what could have been the world’s northernmost Arctic oilfield in production, citing rising costs and supply industry capacity constraints, the oil major said today.

Equinor was now aiming for an investment decision on the Wisting oilfield in the offshore Arctic by the end of 2026 instead of December this year, it said.

Delaying the development is a blow to the Norwegian government’s wish to see more oil and gas activity in the Arctic, but was cheered by green campaigners, who warned of the risk of an oil spill for vulnerable Arctic nature.

Wisting would have been the fourth hydrocarbon field in production in the Norwegian Arctic. Norway already has two gas fields and one oilfield in its Arctic.

“We see a cost increase due to increased global inflation and cost growth in the supply industry nationally and internationally,” Equinor said in a statement.

“There is also uncertainty about the framework conditions for the project and execution capacity in the supplier market.”

Equinor said the updated investment estimate for Wisting ballooned to 104 billion crowns (RM47 billion), up from the 60-75 billion crowns it had previously planned to invest.

“The decision means the project is put in the bottom drawer and is locked… It’s a big hit for the industry and exploration in the Barents Sea,” John Olaisen, an analyst at Oslo-based brokerage ABG Sundal Collier, told Reuters.

Partner Aker BP, however, said the parties planned to explore for more resources around the estimated 500 million barrels of Wisting, named after polar explorer Oscar Wisting, to make the project more profitable.

Equinor and Aker BP have 35 per cent stakes each in the field, while Norway’s Petoro has 20 per cent and INPEX Idemitsu 10 per cent.

Green campaigners cheered the decision.

Greenpeace said “200 millions tonnes of carbon dioxide would stay in the ground”, adding that “vulnerable and valuable nature would be left in peace”.

The Norwegian Environment Agency said this year Equinor had failed to show it was safe to produce oil from Wisting, all year-around in harsh Arctic conditions.

Equinor and partners say they could have developed Wisting in an environmentally safe way. — Reuters