The biggest Norwegian offshore oil project in decades is going to be cheaper and more productive according to energy firm Statoil.
It has announced it has cut development costs by about 20 percent for the first stage of its giant Johan Sverdrup oil field.
“We are now seeing the results of good cooperation between Statoil, its partners and suppliers. We are strongly reducing investment costs, and we are increasing the process capacity, resource estimate and value of the field,” Chief Executive Eldar Saetre told a news conference.
Statoil has also sharply raised the expected output to 440,000 barrels of oil a day. Previously it was due to be between 315,000 and 380,000.
When fully developed, the field is expected to have a production capacity of 660,000 barrels of oil per day, an increase from the 550,000-650,000 barrels per day seen initially.
Importantly in these times of falling prices Statoil said the break-even price for the whole project is now below $30 a barrel – and $25 for the first phase.
Statoil said it would be possible to bring that down even further.