The move is driven by rising costs due to increased global inflation, and market uncertainty due to the war in Ukraine, leading to capacity challenges and bottlenecks in the supply industry
Wisting project is located in the Hoop area in the Barents Sea. (Credit: Equinor ASA)
Norwegian energy company Equinor and its partners in the Wisting oil field have decided to delay the investment decision for the project, which was scheduled for December 2022.
The move is driven by rising costs due to increased global inflation, and market uncertainty due to the war in Ukraine, leading to capacity challenges and bottlenecks in the supply industry.
An investment decision is expected by end of 2026, while the maturation of the project continues.
Last year, Equinor announced that an estimated investment of up to NOK75bn ($7.21bn) may be required for the development of the Wisting oilfield project.
The company said that the updated investment estimate for Wisting will be NOK104bn and the project has a positive Net Present Value (NPV) before and after tax after the update.
Furthermore, Equinor and its partners intend to further mature the development concept, and the power-from-shore solution and select new supplier models for Wisting.
Equinor projects, drilling and procurement executive vice president Geir Tungesvik said: “Equinor and partners have worked in close cooperation with the supply industry and developed a technically feasible and environmentally safe Wisting project for the Barents Sea.
“In our updated investment estimate for the project, we see a cost increase due to increased global inflation and cost growth in the supply industry nationally and internationally.
“There is also uncertainty about the framework conditions for the project and execution capacity in the supplier market. Based on an overall assessment, we choose to postpone the investment decision.”
The Wisting project is owned by Equinor Energy with a 35% stake, AkerBP with a 35% stake, Petoro with a 20% stake and INPEX Idemitsu Norge with a 10% stake.
The project is located in the Hoop area in the Barents Sea, around 310km north of Hammerfest, Norway, in water depths between 390m and 418m.
Last month, Equinor issued a complementary assessment for the Wisting project, which provides more details on how the field can be developed and operated safely and securely.
Aker BP CEO Karl Johnny Hersvik said: “The Wisting partners, led by the operator Equinor, have matured a development concept for the Wisting field which is technically feasible and environmentally safe.
“However, in the current context of cost pressure and potential capacity constraints in the supply industry, combined with proposed changes in the temporary petroleum tax system, it has become more challenging to secure sufficient economic robustness in the project.
“The partnership has therefore concluded to postpone the investment decision for Wisting. We are planning for further exploration activity, aiming to increase the resource base in the area. In parallel, the development concept will be further matured to ensure an economically sound development and a robust project execution.”