Statoil has slashed projected costs on its Arctic region Johan Castberg (SEN, 32/3) FPSO development, with a decision on investments set for 2017, according to CEO Eldar Saetre.

He said the investment estimate has been halved from about $11 billion to $5 to $6 billion.

The Johan Castberg Field is located in the Barents Sea, about 240 km northwest of Hammerfest in northern Norway. The field development comprises the Skrugard, Havis and Drivis fields, all within Production Licence 532.

Statoil has awarded the contract for Johan Castberg Subsea—Integration Pre-FEED and FEED Project with options to IKM Ocean Design.

The contract includes pre-FEED and FEED of pipelines, risers, cables, tie-ins and related structures on the Johan Castberg Field.

The contract has a duration of two years for the completion of pre-FEED and FEED design, covering the subsea umbilicals, riser and flowlines part of the development. Including options, the total contract period and value could extend to seven years.

The engineering work starts immediately and will be run out of IKM’s Lysaker office.

Meanwhile, Statoil also has agreed on a development concept for the Trestakk (31/23) oil and gas discovery after cutting costs.

The field, discovered in 1986, will be developed with five subsea wells tied back to the nearby Asgard Field.

Development of Trestakk had previously been postponed to cut costs amid the crash in oil prices, which have forced energy firms to step up cash discipline and be cautious about investing in new projects.

Recoverable resources for the field are estimated at 75 MMboe, and production could start in 2019.

A final decision on whether or not to go ahead with the Norwegian Sea development will be taken this year.

Offshore