Statoil ASA (STO) has cut the initial costs of developing one of Norway's biggest industrial projects, the Johan Sverdrup Field in the North Sea, by 7%, partner Det norske said on Sept. 25.

With crude oil prices halving in a year, oil firms have been forced to reduce spending, putting the oil services industry under severe pressure to slash costs.

Operator Statoil has cut its estimate for the first phase of the development to 114 billion crowns (US$13.42 billion) from 123 billion in nominal terms, Det norske said in a statement.

"The updated estimate is showing reduced capital expenditures as a result of positive market response in contracts and purchase orders," Det norske said in a statement.

The reduction is based on the same currency assumptions used in the initial development plan.

Oil service contractor FMC Technologies Inc. (FTI) last week said it had to reduce its costs to a level last seen five years ago in order to win a US$172 million contract for the Sverdrup development in the North Sea..

So far contracts worth 45 billion crowns have been awarded for the field, which is estimated to hold between 1.7 billion to 3 billion barrels of oil equivalents, and is considered to be the largest oil find in Norway in 30 years.

Other partners in the field include state-owned Petoro, Sweden's Lundin Petroleum and Denmark's Maersk Oil. ($1 = 8.4940 Norwegian crowns)

Offshore